If a resident individual has income from foreign sources, how is it taxed in Ind
Practice Questions
Q1
If a resident individual has income from foreign sources, how is it taxed in India?
Only if it is repatriated
Only if it exceeds Rs. 2,50,000
Taxed as per Indian tax laws
Not taxed at all
Questions & Step-by-Step Solutions
If a resident individual has income from foreign sources, how is it taxed in India?
Step 1: Determine if the individual is a resident in India. A resident is someone who meets certain criteria based on the number of days they stay in India during the financial year.
Step 2: Identify the sources of income. Foreign income refers to money earned outside of India, such as salary from a job abroad or interest from foreign bank accounts.
Step 3: Understand that resident individuals are taxed on their global income. This means that all income, including foreign income, is subject to Indian tax laws.
Step 4: Calculate the total income, including both Indian and foreign sources, to determine the total taxable income.
Step 5: Apply the applicable income tax rates based on the total taxable income to calculate the tax liability.
Step 6: Consider any tax treaties between India and the foreign country to avoid double taxation, if applicable.
Taxation of Foreign Income – Resident individuals in India are taxed on their global income, which includes income from foreign sources.
