According to a new rule by the income tax department of Xanadu,

Hello, Tushar4284, as well as the rest of the community. There are some meaning issues that keep us from choosing any of the options besides the correct one. I will get into these details below.

If you are reading too closely, you might think that they is ambiguous, since the closest plural noun is [tax] returns; however, we can logically infer that since returns do not earn income, and neither do countries as the closest plural noun before, it must be citizens who have done the earning. The original sentence is free of any obvious errors, both in terms of grammar and meaning, so we can keep it while we assess the other options.

Who is this he? The singular pronoun certainly does not agree with the plural citizens earlier in the sentence. Even if every citizen of Xanadu is a male, they would still be the appropriate pronoun in reference to Xanadu citizens. This is an easy elimination.

The biggest problem here occurs at the beginning. The article the in reference to income is restrictive and has no earlier anchor in the sentence. Yes, the word income appears as an adjective in income tax returns, but it is used to define the type of return. It is not the same as the income itself. Since the main clause begins with Xanadu citizens, a subsequent reference to their income would be more appropriate. Beyond this meaning issue, the passive construct is not earned [by someone] is less preferable to a more active iteration. It is true that some correct SC answers employ the passive tense, but when an alternative exists in the active voice that is also clear and free of other errors, the latter type of sentence will win out.

This one looks fine until you link it up with the non-underlined portion that follows: none of their income is in their home country. What is is doing in the sentence in place of was and some sort of action word, as in earned? Somebody earns or draws income in a certain place. Income itself cannot be in a home country or any other physical location. In short, the meaning of the sentence is off, and if anything, the answer choice illustrates why it is important to consider the whole sentence before making a determination as to the validity of the answer.

Behind (B), this is probably the second easiest elimination. The verb tense should be in the past, not in a conditional. Citizens either did or did not earn income in Xanadu. Case closed.

I hope that helps shed some light on the issues in the different answer choices. If anybody has further questions, I would be happy to offer my thoughts. Good luck with your studies.

- Andrew