Basic Concept
QUESTION FOR PRACTICE

Q.1. Mr. Mahesh an Australian cricketer has been coming to India for 100 days every year since 1998-99.
(a) Determine his residential status for the assessment year 2014-15.
(b) Will your answer be different if he has been coming to India for 110 days instead of 100 every year.
Ans. (a) NOR, (b) OR

Q.2. Mr. Mahesh came to India from America for the first time on 10th October, 2012. He returns to his home country after staying in India upto 5th July, 2013.
Will he be a resident in India for the assessment year 2014-15?
Ans. NRI

Q.3. Mr. Mahesh came to India from japan for the first time on 2nd of October, 2011. He returned to his home country after staying in India upto 28th of September, 2013.
Will he be a resident in India for the assessment years 2013-14 and 2014-15?
Ans.  1. NRI 2. NRI

Q.4. Mr. Mahesh came to Indian citizen left India for the first time on 21-9-2012 for employment in Germany.
During the previous year 2013-14 he comes to India on 5-5-2013 for 150 days.
Determine the residential status of ‘X’ for assessment years 2013-14 and 2014-15?
Ans. NRI for both.

Q.5. Mr. Mahesh was borne in Lalhore in 1948. He has been staying in England since 1975. He came to visit India on 3-10-2013 and returns on 30-3-2014.
Determine his residential status for assessment year 2014-15 assuming that he was in India for 400 days during the four preceding previous year immediately preceding the relevant previous year?
Ans. NRI

Q.6. Mr. Mahesh was born in England in 1972. His father was born in America in 1941. Mahesh’s grand father was born in Lahore in 1921. Will ‘Mahesh’ be a resident in India if he visits India for 180 days during the previous year 2013-14.
He was in India for 370 days in the preceding four previous year.
Ans. NRI

Q.7. Mr. Rahul a citizen of India left India on 6-6-2008 for employment abroad. Prior to this date he was always in India. During 2011-12 and 2012-13, he visited India for 145 days and 165 days respectively. In the previous year 2013-14 he came to India on 7-4-2013 and left on 30-11-2013.
Determine his residential status for assessment year 2014-15?
Ans. OR

Q.8. Mr. Vasu was born in 1979 in India. His parents were also born in India in 1952. His grand parents were, however, born in England. ‘Vasu’ was residing in India till 15.3.2010. Thereafter, he migrated to England and took the citizenship of that country on 15.3.2014. He visits India during 2013-14 for 90 days.
Determine the residential status of ‘Vasu’ for the assessment year 2014-15?
Ans. OR

Q.9. Mr. Yash a citizen of India, on 21-10-2009 for employment abroad. Earlier to this date, he was always in India. During 2011-12 and 2013-14 he came to India for 168 days and 185 days respectively.
(a) Determine his residential status for assessement year 2014-15.
Ans. (a) OR (b) OR

Q.10. Mr. Sing left India for the first time on May 20,2009. During the financial year 2013-14, he came to India once on May 27 for a period of 55 day. Determine his residential status for the assessement year 2014-15?
Ans. NRI

Q.11. Mr. Ali comes to India, for the first time, on April 16, 2009. During his stay in India up to October 5, 2013, he stays at Delhi up to April 10, 2013 and thereafter remains in Madras till his departure from India.
Determine the resident status of X for the assessment year 2014-15?
Ans. NOR

Q.12. Mr. Vijay a foreign national (not being a person of India origin), leaves India for the first time on April 15,2010. During the financial years, 2010-11, 2011-12 and 2012-13 and 2013-14 he is in India for 130 days, 80 days, 210 days and 75 days respectively.
Determine the residential status of Vijay for the assessment year 2014-15?
Ans. NOR

Q.13. Mr. Rakesh a foreign citizen (not being a person of India origin), leaves India for the first time in the last 20 years on November 20, 2011. During the calendar year 2012, he comes to India on September 1 and stays for a period of 30 days. During the calendar year 2013, he does not visit India at all but comes to India on January 16, 2014.
Determine the residential status of X for the assessment year 2014-15 ?
Ans. OR

Q.14. Mr. Vicky an Indian citizen, who is appointed as senior taxation officer by the Government of Nigeria, leaves India, for the first time, on September 26, 2012 for joining his duties in Nigeria. During the previous year 2013-14, he comes to India for 176 days.
Determine the residential status of Vicky for the assessment years 2013-14 and 2014-15?
Ans. NRI, NRI

Q.15. Mr. Rajesh an Indian citizen, leaves India for the first time on September 20,2011 for taking an employment outside India. He comes to India for a visit of 146 days on April 10,2012. He comes back on May 17, 2013.
Find out the resident status of Rajesh for the assessment year 2014-15?
Ans. OR

Q.16. Mrs. John, an American citizen comes to India for the first time in previous year 2008-09 for 120 days. During previous years 2009-10. 2010-11, 2011-12, 2012-13 and 2013-14 she stayed in India for 150 days, 100 days, 120 days. 190 days and 94 days respectively.
Determine her residential status for the assessment year 2014-15.
Ans. Resident but not ordinarily resident in India.

Q.17. Indian citizen and businessman Shri Raju Gopal, who resides in Jaipur, went to Germany for purposes of employment on 15.8.2012 and came back to India on 10.11.2013. He has never been out of India in the past.
(a) Determine residential status of Shri Raju Gopal for the assessment year 2014-15.
Ans. Non – resident, ordinatrily resident in India

Q.18. Mr. Kohli, a citizen of India, is an export manager of Arjun Overseas Limited, an Indian Company, since 1.5.2008. He has been regularly going to USA for export promotion. He spent the following days in U.S.A. for the last five years:
 Previous year ended No. of days spent in USA 31.3.2010 319 days 31.3.2011 150 days 31.3.2012 270 days 31.3.2013 310 days 31.3.2014 295 days
Determine his residential status for assessment year 2014-15 assuming that prior to 1.5.2008 he had never travelled abroad.
Ans. Resident and ordinarily resident in India

Q.19. Karta of one Hindu Undivided Family comes to India every year for minimum 60 days and maximum 91 days. Determine residential status of the Hindu Undivided Family and also that of the Karta for the assessment year 2014-15.
Ans. Hindu Undivided Family is resident since the Karta has come to India for at least 60 days but the stay of Karta during seven years can be maximum 637 days hence Hindu Undivided Family shall be considered to be resident but not ordinarily resident. Karta in his individual capacity is non-resident because he cannot comply with even one of the two basic conditions.

Q.20. One Hindu Undivided Family is being managed partly from Mumbai and partly from Nepal. Umesh Singh (a foreign citizen), Karta of Hindu Undivided Family, comes on a visit to India every year since 1981 in month of April for 105 days.
Determine residential status of the Hindu Undivided Family and also that of the Karta in his individual capacity for the assessment year 2014-15.
Ans. For the previous year 2013-14, the control and management of the affairs of Hindu Undivided Family is being partly managed from India. Hence Hindu Undivided Family is resident but Mr. Umesh Singh cannot comply with any of the conditions of section 6(6)(b), hence Hindu Undivided Family is resident and ordinarily resident.
Karta shall be considered to be resident and ordinarily resident because his stay during 7 years is 735 days. Also, he will not be non-resident in nine years out often years preceding the relevant previous year.

FILL IN THE BLANK QUESTIONS WITH ANSWER

Q.1. When the Finance Bill is approved by both the Houses of Parliament and receives the assent of the president, it becomes finance Act.

Q.2. Circulars are binding upon the Income tax authorities, but the same are not binding on the assessee. (True / False)

Q.3. Income earned by every person is chargeable to income tax, if it exceeds the …………… exemption limit.

Q.4. Normal tax rates are given by Finance Act but special rates are given in Income tax Act. (True / False)

Q.5. Person does not include Foreign Company. (True / False)

Q.6. Local authority includes Municipality. (true / False)

Q.7. Can previous year be less than one year?

Q.8. What is the status of HDFC Bank Ltd.?

Q.9. What is the previous year in the following cases?

Q.10. Can Income of the previous year are taxable in the assessment year?

Q.11. Assessment of persons leaving India is done in the same previous year. (True / False)

Q.12. What is the maximum exemption limit in case of:
(a) Woman, below 65 years
(b) Senior Citizen
(c) Individuals other than above

Q.13. Surcharge is levied only when total income exceeds Rs.10,00,000. (True / False)

Q.14. Surcharge is levied @
(a) 20%
(b) 10%
(c) 15%
(d) 12%

Q.15. Every assessee is a ‘person’, but every person need not be an assessee. (True / False)

Q.16. Pin money is treated as Taxable Income. (True / False)

Q.18. Assessment means computation of taxable income and imposition of tax liability. (True / False)

Q.19. Previous year and Assessment year are same? (True / False)

Q.20. Professional fees realized after death are assessable to tax (True / False)

Q.21. Undisclosed income detected by Assessing officer may be charged as income of the assessee of that previous year. (True / False)

Q.22. Single person can constitute HUF. (True / False)

Q.23. Every company incorporated in India is treated as an Indian Company. (True / false)

Q.24. ‘Income’ does not include compensation money. (True / False)

Q.25. Items not falling under specified categories can still be income. (True / False)

Q.26. Capital Expenditure is not deductible while computing taxable income until the law expressly so provides. (True / False)

Q.27. There is no surcharge in case of co-operative societies and local authorities. (True / False)

Q.28. Income must be in cash only. (True / False)

Q.29. A contingent income is not income. (True / False)

Q.30. Every illegal income is taxed exactly like legal income (true / False)