Royalty and technical service income computed on a net basis when connected to a permanent establishment, limiting deductible payments. Income of non-residents and foreign companies by way of royalties or fees for technical services is computed on a net income basis when connected to a permanent establishment or fixed place of profession in India; deductions are limited to expenditures wholly and exclusively incurred for that establishment, and payments to head office or other offices are disallowed except reimbursements of actual expenses.