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BASIC CONCEPT AND PROVISION RELATED TO NON-RESIDENT
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....ASIC CONCEPT AND PROVISION RELATED TO NON-RESIDENT<br>By: - GEETANJALI PANDEY<br>Income Tax<br>Dated:- 1-5-2023<br><br>IMPORTANT CONCEPT AND PROVISIONS RELATING TO THE TAXABILITY OF NON-RESIDENT Income Tax Act has contained various provisions relevant to Non-Resident person depend upon its residential status, Scope of Income, business connection or permanent establishment in India etc. Under this....
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.... Article, I would like to draw attention toward those major areas which is the basic/initial point of determining the taxability of Non-resident in India. Once we checked these filters one by one on Non-resident, we can get clear picture about the taxability of Non-resident. These five major areas are interlinked, so we will do combined study of these Sections * Combined Study of Definition of ....
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...."Non-Resident" and its "Residential status" * Definition of Non-resident- (Sec 2(30) of the Income Tax Act A non-resident is a person who is not a resident as per Sec 6 of the Income Tax Act. (currently I am ignoring the non-ordinarily resident here which is covered in the definition of non -resident for the purpose of Sec 92, 93 and 168, will discuss the same in next article) * Scope of I....
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....ncome & Income deemed to be received in India/ Income deemed to be accrue/arise in India * Scope of Income (as per Sec 5(2) of the Income Tax Act) The "Total income" of a non-resident shall include the following two: Explanation 1.-Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken ....
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....into account in a balance sheet prepared in India. Explanation 2.-For the removal of doubts, it is hereby declared that income which has been included in the total income of a non-resident on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included on the basis that it is received or deemed to be received by him in India. * Income deem....
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....ed to be received in India (as per Sec 7 of the Income Tax Act) Income deemed to be received in India mainly includes: * Income deemed to accrue/arise in India (as per Sec 9 of the Income Tax Act) This area is quite complicated and need to be observed and examined carefully while determining the Total income of Non-resident. This income will be considered in the Total income of Non-resident i....
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....rrespective of whether directly/indirectly. INCOME ACCRUING OR ARISING FROM We will discuss all the above income which is tabulated below in detailed form and manner in my Next Article titled " Income deemed to be accrue/arise In India" to get a clear understanding of all the provisions and concepts considered for determining the Total income taxable in the hands of Non-resident ============= D....
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....ocument 1 ⚫ Definition of Non-resident (Sec 2) & Residential status (Sec 6) ⚫ Scope of Income of Non-resident (Sec 5) & • Income deemed to be received in India (Sec 7) & Income deemed to accrue/arise in India (Sec 9) } Linked Linked Document 2 Resident (Sec 6 of the Income Tax Act) INDIVIDUAL Sec 6(1) An individual is said to be 'Resident' in India in any previous ye....
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....ar, if satisfies any of the two conditions: (a) The period of stay during the relevant previous year is 182 days or more (b) The period of stay during the relevant previous year is 60 days or more and the period of stay during the four previous year immediately preceding the relevant previous year is 365 days or more. HUF/FIRM/AOP/BOI/ OTHER PERSON Sec 6(2) Resident where duri....
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....ng the previous year, ✓ the whole or partial of the and control management of its affairs is situated in India' Non-Resident- where during the previous year, COMPANY Sec 6(3) A company is said to be Resident', if ✓ It is an Indian company, OR the control and management of its affairs is wholly situated outside India. Its place of effective management is in ....
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....India in that year. Place of effective management" means a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made. Document 3 INCOME RECEIVED IN INDIA INCOME ACCRUE/ARISE IN INDIA OR INCOME DEEMED TO BE RECEIVED IN INDIA OR INCOME DEEMED TO BE ACCRUE/ARISE IN INDIA Document 4 RECOGNIZED PROVI....
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....DENT FUND (Fourth Schedule (Part A) ✓ Annual accretion to the balance of RPF A/c maintained by the employee which consist of • Contribution made by employer in excess of 10% of the salary, and • Interest credited to the balance of RPF A/c PENSION SCHEME U/S 80CCD Contribution made, by the Central Government or any other employer in the previous year, to the accoun....
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....t of an employee under a pension scheme referred to in section 80CCD. Transferred balance in a recognized provident fund to the extent of calculation made by Income Tax Officer of the aggregate of all sums comprised in a transferred balance. Document 5 BUSINESS CONNECTION IN INDIA OR FROM SIGNIFICANT ECONOMIC PRESENCE IN INDIA PROPERTY, CAPITAL ASSET OR ANY SOURCE OF INCOME IN INDIA S....
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....ALARY IN INDIA INTEREST AND DIVIDEND ROYALTY/FEES FOR TECHNICAL FEES ANY SUM OF MONEY, OR VALUE OF PROPERTY RECEIVED FROM RESIDENT WITHOUT CONSIDERATION, AGGREGATE VALUE OF WHICH EXCEED RS. 50000<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....