Chapter II- BASIS OF CHARGE
Section 4 . Charge of income-tax
(1). Where any Central Act enacts that income-tax5 shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year 6in accordance with, and 7[subject to the provisions (including provisions for the levy of additional income-tax) of, this Act] in respect of the total income6of the previous year 8[***] of every person :
Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly.
(2). In respect of income chargeable under sub-section (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act.
Section 5. Scope of total income.
(1) Subject to11 the provisions of this Act, the total income 12 of any previous year of a person who is a resident includes all income from whatever source derived which—
a) is received13 or is deemed to be received13 in India in such year by or on behalf of such person ; or |
||
b) accrues or arises13 or is 13deemed to accrue or arise to him in India during such year ; or |
||
c) accrues or arises13 to him outside India during such year :
Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6) * of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India. |
||
(2) Subject to11 the provisions of this Act, the total income 12 of any previous year of a person who is a non-resident includes all income from whatever source derived which—
a) is received14 or is deemed to be received in India in such year by or on behalf of such person ; or |
||
b) accrues or arises14 or is 14deemed to accrue or arise to him in India during such year. Explanation 1—Income accruing or arising outside India shall not be deemed to be received14 in India within the meaning of this section by reason only of the fact that it is taken 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 person on the basis that it has accrued15 or arisen15 or is deemed to have accrued 15 or arisen15 to him shall not again be so included on the basis that it is received or deemed to be received by him in India. |
Section 5A- Apportionment of income between spouses governed by Portuguese Civil Code.
( 1) Where the husband and wife are governed by the system of community of property (known under the Portuguese Civil Code of 1860 as "COMMUNIAO DOS BENS") in force in the State of Goa and in the Union territories of Dadra and Nagar Haveli and Daman and Diu, the income of the husband and of the wife under any head of income shall not be assessed as that of such community of property (whether treated as an association of persons or a body of individuals), but such income of the husband and of the wife under each head of income (other than under the head "Salaries") shall be apportioned equally between the husband and the wife and the income so apportioned shall be included separately in the total income of the husband and of the wife respectively, and the remaining provisions of this Act shall apply accordingly
(2) Where the husband or, as the case may be, the wife governed by the aforesaid system of community of property has any income under the head "Salaries", such income shall be included in the total income of the spouse who has actually earned it.]
Section 6-Residence in India.
(1) An individual is said to be resident in India in any previous year, if he— |
a). is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more ; or |
||||
b). 19[***] |
||||
c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year |
||||
[Explanation. 1]—In the case of an individual,— |
||||
(a) |
being a citizen of India, who leaves India in any previous year22 23[as a member of the crew of an 24Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or] for the purposes of employment22 outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and eighty-two days" had been substituted ; |
|
(b) |
being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause ( e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred and 25[eighty-two] days" had been substituted.] |
[Explanation 2.
— For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed.27]
(2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management28 of its affairs 28 is situated wholly28 outside India.
(3) A company is said to be a resident in India in any previous year, if— |
(i) |
it is an Indian company; or |
|
(ii) |
its place of effective management, in that year, is in India |
|
Explanation.1
— For the purposes of this clause "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.]
(4) Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India. |
(5) If a person is resident in India in a previous year relevant to an assessment year in respect of any source of income, he shall be deemed to be resident in India in the previous year relevant to the assessment year in respect of each of his other sources of income.
(6) A person is said to be "not ordinarily resident" in India in any previous year if such person is— |
(a) |
an individual who has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less; or |
|
(b) |
a Hindu undivided family whose manager has been a non-resident in India in nine out of the ten previous years preceding that year, or has during the seven previous years preceding that year been in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days or less.] |
Section – 7 Income deemed to be received.
The following incomes shall be deemed to be received in the previous year :—
(i) |
the annual accretion in the previous year to the balance at the credit of an employee participating in a recognised provident fund, to the extent provided in rule 6 of Part A of the Fourth Schedule ; |
|
(ii) |
the transferred balance in a recognised provident fund, to the extent provided in sub-rule (4) of rule 11 of Part A of the Fourth Schedule ; |
|
(iii) |
the contribution made, by the Central Government [or any other employer] in the previous year, to the account of an employee under a pension scheme referred to in section 80CCD.] |
Section 8. Dividend income
For the purposes of inclusion in the total income of an assessee,—
(a) any dividend] declared by a company or distributed or paid by it within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause ( e) of clause (22) of section 2 shall be deemed to be the income of the previous year in which it is so declared, distributed or paid, as the case may be ;
(b) any interim dividend shall be deemed to be the income of the previous year in which the amount of such dividend is unconditionally made available by the company to the member who is entitled to it.
Section 9. Income deemed to accrue or arise in India
(1) The following incomes shall be deemed to accrue or arise in India :—
(2) Notwithstanding anything contained in sub-section (1), any pension payable outside India to a person residing permanently outside India shall not be deemed to accrue or arise in India, if the pension is payable to a person referred to in article 314 of the Constitution or to a person who, having been appointed before the 15th day of August, 1947, to be a Judge of the Federal Court or of a High Court within the meaning of the Government of India Act, 1935, continues to serve on or after the commencement of the Constitution as a Judge in India.
[Explanation.—For the removal of doubts, it is hereby declared that for the purposes of this section, income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause ( vi) or clause (vii) of sub-section (1) and shall be included in the total income of the non-resident, whether or not,—
(i) the non-resident has a residence or place of business or business connection in India; or |
(ii) the non- resident has rendered service in India
9A. Cer Section 9A:- Certain activities not to constitute business connection in India . (1) Notwithstanding anything contained in sub-section (1) of section 9 and subject to the provisions of this section, in the case of an eligible investment fund, the fund management activity carried out through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India of the said fund. (2) Notwithstanding anything contained in section 6, an eligible investment fund shall not be said to be resident in India for the purpose of that section merely because the eligible fund manager, undertaking fund management activities on its behalf, is situated in India. (3) The eligible investment fund referred to in sub-section (1), means a fund established or incorporated or registered outside India, which collects funds from its members for investing it for their benefit and fulfils the following conditions, namely:—
Provided that the conditions specified in clauses (e), ( f)and (g) shall not apply in case of an investment fund set up by the Government or the Central Bank of a foreign State or a sovereign fund, or such other fund as the Central Government may subject to conditions, if any, by notification in the Official Gazette, specify in this behalf. 4) The eligible fund manager, in respect of an eligible investment fund, means any person who is engaged in the activity of fund management and fulfils the following conditions, namely:—
5) Every eligible investment fund shall, in respect of its activities in a financial year, furnish within ninety days from the end of the financial year, a statement in the prescribed form77, to the prescribed income-tax authority containing information relating to the fulfilment of the conditions specified in this section and also provide such other relevant information or documents as may be prescribed. 6) Nothing contained in this section shall apply to exclude any income from the total income of the eligible investment fund, which would have been so included irrespective of whether the activity of the eligible fund manager constituted the business connection in India of such fund or not. 7) Nothing contained in this section shall have any effect on the scope of total income or determination of total income in the case of the eligible fund manager. 8) The provisions of this section shall be applied in accordance with such guidelines and in such manner as the Board may prescribe in this behalf. 9) For the purposes of this section,—
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|