The following amounts of income have been computed for Mr. Ramchand for the previous year ended on 31.3.25:
a) Salary accrued and received in India ₹ 25,000
b) Profit from hotel business in Japan ₹ 50,000
c) Dividends declared in Japan received in India ₹ 10,000
Compute the total income of Mr. Ramchand for the relevant assessment year if he is an ordinary resident.
Answer (2)
Mr. Ramchand's total income for the assessment year is ₹85,000, which includes salary accrued in India, profit from his hotel business in Japan, and dividends declared in Japan. Each component is taxable as he is an ordinary resident. Therefore, the final computation involves summing all these amounts.
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To compute the total income of Mr. Ramchand for the relevant assessment year, we need to consider the different sources of income and note that he is an 'ordinary resident' which implies that worldwide income is taxable in India.
Here's a breakdown of each income component:
Salary accrued and received in India : ₹ 25,000
Since this income is accrued and received in India, it is fully taxable in India.
Profit from hotel business in Japan : ₹ 50,000
As Mr. Ramchand is an ordinary resident, income earned outside India is also taxable. Thus, this profit from Japan will be included in taxable income.
Dividends declared in Japan and received in India : ₹ 10,000
Since the dividends are received in India, they are taxable in India. However, typically dividends may have special taxation rules, but for simplicity, we'll include them as fully taxable here.
Now, we add up all these components to determine the total income:
Total Income = Salary + Profit from business + Dividends Total Income = 25 , 000 + 50 , 000 + 10 , 000 = 85 , 000
Therefore, the total income of Mr. Ramchand for the relevant assessment year is ₹ 85,000. This total includes all worldwide income sources due to his status as an ordinary resident.
