1. Income received in India.
The source of income may be situated anywhere in the world but if its first re’eipt is in India, it is taxable for all. Income may be received by the assessee himself or by his agent on his behalf or is actually received by him or it might be credited to his account.
2. Deemed to be received in India.
These incomes are actually not received by assessee instead these are credited to his account to be ‘paid at a later date or are appropriated against future liability e.g.
(a) Employer’s contribution to provident fund.
(b) Interest accrued on provident fund balance.
(c) Interest accrued on N.S.C. VIII issue.
(d) Tax deducted at source. [Taxable for R and NR]
3. Income accruing or arising in India.
The terms accrue or arise have the same meaning i.e. to grow, to originate. Income accrues where source is situated. Salary accrues where service is rendered. Rent accrues where house property is located. Business Profit or professional gain arises where business is carried on or profession is set up. Capital gain accrues where asset is located. Dividend, Bank interest etc. accrue where investment is made. If source of any of these incomes is situated in India then income from these sources will be accruing in India.
4. Income deemed to accrue or arise in India.
These incomes actually accrue outside India but u/s 9 these are deemed to accrue in India. These incomes are
(a) Salary paid by govt. to its employees posted abroad,
(b) Pension paid outside India but for services rendered in India,
(c) Income from a capital asset located in India although transaction has taken place outside India,
(d) Dividend paid by Indian company outside India,
(e) Apportionment of profits : In case a part of transaction takes place in India and the other part outside India, proportionate profits from such transaction relating to Indian part shall be deemed to accrue in India, [Taxable for R and NR]
(f) Income from shooting of a film in India by a non-resident shall not be deemed to accrue in India, hence taxable only for residents.
5. Any income accruing and received outside India
It shall be taxable for Resident only.
6. Past Untaxed Income
Any income, which was exempted earlier but is brought to India in current PlY shall be exempted for all.