Incomes deemed to accrue or arise in India:
Certain types of income are deemed to accrue or arise in India even though they may actually accrue or arise outside India.
Categories of income are:
1. Any income accruing or arising to an assessee in any place outside India whether directly or indirectly
- Through or from any business connection in India,
- Through or from any property in India,
- Through or from any asset or source of income in India or
- Through the transfer of a capital asset situated in India
2.
- Income, which falls under the head “salaries”, if it is earned in India. Any income under the head salaries payable for rest period or leave period which is preceded and succeeded by services rendered in India, and forms part of service contract of employment, shall be regarded as income earned in India.
3. Income from salaries which is payable by the government to a citizen of India for services rendered outside India.(however allowances and perquisites paid outside India by the Government is exempt).
4. Dividend paid by an Indian company outside India.
5. Interest if it is payable by
- The Central Government or State Government.
- A person resident in India (except where it is payable in respect of any money borrowed and used for the purpose of business or profession carried on by him outside India or for the purposes of making or earning any income from any source outside India)
- A non-resident when it is payable in respect of any debt incurred or moneys borrowed and used for the purpose of a business or profession carried on in India by him. Interest on money borrowed by the non-resident for any purpose other than a business or profession, will not be deemed to accrue or arise in India..
6. Royalty when it is payable by
- The Government, or
- A person who is resident in India except in cases where it is payable for the transfer of any right or the use of any property or information or for the utilization of services for the purpose of a business or profession carried on by such person outside India or for the purpose of making or earning any income from any source outside India, or
- A non-resident only when the royalty is payable in respect of any right, property or information used or services utilized for purposes of a business or profession carried on in India or for the purposes of making or earning of any income from any source in India.
7. Fees for technical services if they are payable by
- The Government
- A person who is resident in India, except in cases where the fees are payable in respect of technical services utilized in a business or profession carried on by such person outside India or for the purpose of making or earning any income from any source outside India.
- A person who is a non resident, only where the fees are payable in respect of services utilized in a business or profession carried on by the non-resident in India or where such services are utilized for the purpose of making or earning any income from any source in India
