Royalty and technical service income computed net when connected to a permanent establishment, taxed at regular rates. Income by way of royalty or fees for technical services received by non-residents and foreign companies from the government or an Indian concern is computed on a net income basis, allowing business expense deductions where the non-resident operates through a permanent establishment or fixed place of profession in India and the relevant right, property or contract is effectively connected with that establishment; deductions are limited to expenses wholly and exclusively for that establishment and payments to head office or other offices are disallowed except reimbursements of actual expenses.