Scope of Total income

Particulars Resident and ordinary resident Resident but not ordinary resident Non-Resident  
1.Income recieved or deemed to be received in India during the previous year Taxable Taxable Taxable  
2.Income accruing or arising or deemed  to accrue or arise in India. Taxable Taxable Taxable  
3.Income accruing or arising outside India:      
a) Business controlled in India or  profession set up in India. Taxable Taxable Not Taxable
b) Any other Income Taxabe Not Taxable Not Taxable

Income Deemed To Be Received In India – under Income Tax Act, 1961

  1. Income Received in India Any income which is received in India, during the previous year by any assessee, is liable to tax in India, irrespective of the residential status of the assessee and the place of accrual of such income. The receipt of income refers to the first occasion when the recipient gets the money under his own control.
  2. Income Deemed to be received in India – Section 7 : The following incomes shall be deemed to be received in India in the previous year even in the absence of actual receipt:
  • Contribution made by the employer to the recognized provident fund in excess of 12% of the salary of the employee
  • Contribution made by the employer to the recognized provident fund in excess of 12% of the salary of the employee
  • Interest credited to the RPF of the employee which is in excess of 9.5% p.a.
  • Transfer balance from the unrecognized fund to a Recognized Provident Fund
  • The contribution made, by the Central Government or any other employer in the previous year, to the account of an employee under a notified contributory pension scheme referred to in section 80CCD.

Income Deemed to accrue or arise in India – Section 9

The following income shall be deemed to accrue or arise in India:

Section Income
9(1)(i) (a)Any income through or from any business connection in India.
(b)Any income through or from any property in India.
(c)Any income through or from any asset or source of income in India; or
(d)Any income through transfer of a capital asset situated in India.
9(1)(ii) Any salary income, if it is earned in India
9(1)(iii) Any salary payable by the Government to an Indian citizen for service outside India
9(1)(iv) Dividend paid by an Indian company outside India
9(1)(v) Interest payable by Government, resident or non-resident.
9(1)(vi) Royalty payable by Government, resident or non-resident.
9(1)(vii) Fees for technical services payable by Government, resident or non-resident.

Leave a Reply

Your email address will not be published. Required fields are marked *