(1) Received in India :
Any income which is received in India, during the previous year by any assessee, is liable to tax in India, irrespective of the residential status of the assessee and the place of accrual of such income .
Receipts means the first receipt: The receipt of income refers to the first occasion when the recipient gets the money under his own control. Once an amount is received as income, any remittance or transmission of the amount to another place does not result in receipt within the meaning of this clause at the other place .
This principle is of importance, firstly, in determining the year of receipt, and secondly, for ascertaining the incidence of taxation where it depends purely upon receipt of income. For instance, in the case of non-residents, their foreign income is not assessable, unless it is actually received in India. In their case, unless, at the time the money is received in India, it is received as income from an outside source, such receipt will not be an income receipt. If a non-resident had already received moneys outside India (in an earlier year or during the previous year) as income or exempt income and he was transferring the funds into India in the accounting year, such moneys will not count as income in the eyes of law .
(2) Income Deemed to be Received in India [Section 7]:
The following incomes shall be deemed to be received in India in the previous year even in the absence of actual receipt:
- Contribution made by the employer to the recognized provident fund in excess of 12% of the salary of the employee;
- Interest credited to the RPF of the employee which is in excess of 9.5% p.a.
- Transfer balance from the unrecognized fund to a Recognised Provident Fund (It has been discussed in the Chapter on ‘Income from Salaries’);
- The contribution made, by the Central Government or any other employer in the previous year, to the account of an employee under a notified contributory pension scheme referred to in section 80CCD.