Tax planning

Which of the following conditions differentiates a Resident and Ordinarily Resident (ROR) from a Resident but Not Ordinarily Resident (RNOR)?

• A person is a Resident and Ordinarily Resident if they satisfy at least one basic condition and at least one additional condition.

• A person is a Resident and Ordinarily Resident if they satisfy all the basic and additional conditions.

• A person is Resident but Not Ordinarily Resident if they satisfy at least one basic condition but fail both additional conditions.

• A person is Resident and Ordinarily Resident if they meet the income threshold for taxation in India.

Poulomi, an Indian citizen, is leaving India for employment abroad on October 1, 2024. Her total stay in India for the year will be 183 days. How will her residential status be determined for AY 2025-26?

• She will be considered a Resident because she has stayed in India for more than 182 days.

• She will be considered a Non-Resident because she is leaving India for employment.

• She will be considered Resident but Not Ordinarily Resident.

• She will be considered a Resident only if her total income exceeds Rs. 15,00,000.

Mr. Shashank, an Indian citizen, has the following income for AY 2023-24:

• Business income earned in the UK (controlled from India): ₹10,00,000

• Salary received in India for work done abroad: ₹8,00,000

• Rent from a property in the USA received in a USA bank account: ₹5,00,000

If he is a Non-Resident, which of the following income components will be taxable in India?

• Only salary received in India

• Business income from the UK and salary received in India

• Only rent from the USA

• Business income, salary, and rent will all be taxable

Under the new provisions (effective from AY 2021-22), an individual will be deemed a Resident but Not Ordinarily Resident if:

• They are an Indian citizen with total income (excluding foreign sources) exceeding ₹15,00,000 and are not taxed in any other country.

• They are an Indian citizen residing in India for more than 240 days in a financial year.

• They are a foreign citizen earning more than ₹20,00,000 in India.

• They have stayed in India for at least 365 days in the past four years and 182 days in the current year.

Which of the following statements correctly analyzes the tax implications for a Non-Resident Indian (NRI)?

• An NRI is taxable in India only on income earned in India or deemed to be received in India.

• An NRI is taxable on their global income in India.

• An NRI must file income tax returns in India even if they have no income from Indian sources.

• An NRI can claim residential tax benefits similar to a Resident if their income exceeds ₹15,00,000.

A salaried employee, earning ₹8 lakh per annum, has multiple exemptions such as HRA, LTA, and EPF contributions. If the tax liability under the old regime is ₹48,360 and under the new regime is ₹23,400, which analytical reasoning best supports the selection of the new tax regime?

• The old regime is beneficial as it allows multiple deductions and exemptions.
  
  

• The new regime is beneficial as the net tax liability is lower despite the removal of deductions

• The employee should opt for the old regime to maximize savings on HRA

• The employee should split income under both regimes to optimize tax savings.

An IT professional earning ₹13 lakh per annum has made tax-saving investments like ELSS, term life insurance, and HRA claims. His tax liability under the old regime is ₹1,47,760, whereas under the new regime, it is ₹88,400. How should he decide between the two regimes?

• The old regime is preferable as it allows tax-saving investments.

• The new regime is preferable as it has a lower tax liability despite no exemptions.

• The employee should opt for the old regime as it offers flexibility in deductions.

• The choice does not impact total taxable

A business owner earning ₹15 lakh annually has invested ₹1.5 lakh in PPF and earned ₹12,000 as savings bank interest and ₹36,000 as PPF interest. What is the key consideration in deciding whether to opt for Section 115BAC?

• The new tax regime is always better for business owners.
  
  

• Since PPF interest is tax-free, the old regime should be selected.
  
  

• The new tax regime is preferable if the tax liability under 115BAC is lower despite no deductions.

• Business income is not taxable under the new tax regime.

Under the new tax regime, the rebate under Section 87A is applicable for taxable income up to ₹7 lakh. Which of the following is the most appropriate analytical conclusion?

• A taxpayer earning ₹6.9 lakh will pay tax under both regimes.

• A taxpayer earning ₹7.2 lakh under the new regime must pay tax but can reduce it via deductions.
  
  

• A taxpayer earning ₹6.9 lakh benefits under the new regime as no tax is payable.

• The rebate applies irrespective of the income earned.

If a salaried employee fails to choose between the old and new tax regimes at the beginning of the financial year, how is their tax deducted at source (TDS) treated?

• The employer deducts TDS based on the old regime.

• The new regime is the default, but the choice can be modified at the time of return filing.

• The employer selects the best tax regime on behalf of the employee.
  
  

• The taxpayer loses the right to switch tax regimes for that year