A non-resident individual (aged 45) has agricultural income from rural land of Nil taxable effect and long-term capital gains of Rs 85,000 under section 112 from sale of a vacant site, with other income of Rs 2,40,000, for A.Y. 2026-27 (default regime). The tax before cess is:

1. LTCG under section 112 is taxed flat at 12.5% for A.Y. 2026-27. 2. A RESIDENT individual/HUF may reduce such gains by any unexhausted basic exemption limit — but a non-resident cannot. 3. Other income Rs 2,40,000 is below the default-regime basic exemption limit of Rs 4,00,000, so slab tax on it is Nil; the unexhausted limit of Rs 1,60,000 is simply lost against the LTCG. 4. Tax = 12.5% x Rs 85,000 = Rs 10,625 (before cess). 5. Rebate under section 87A is not available to a non-resident either. 6. Options A and B both smuggle in the exemption-limit adjustment that only residents get; option C uses the pre-amendment 10% rate that no longer applies. _Source: ICAI CA Inter P3(A) Income-tax SM (May 2026), Ch 3 Unit 4 Capital Gains, PDF p. 88_