Non-resident receives interest of Rs. 5 lakhs from US source while staying in USA. This income is:
AChargeable as foreign income
BChargeable at 30%
CChargeable under DTAA only
DNot chargeable in India
Answer & Solution
Correct answer: D. Not chargeable in India
1. Section 5(2) determines scope of total income for non-residents — only income received or deemed to be received in India and income accruing or deemed to accrue in India.
2. Interest from a US source earned while abroad is neither received nor accrued in India.
3. Therefore outside Section 5(2) and not chargeable in India.
_Source: ICAI BoS CA Final Paper 7, Ch 1 "Basic Concepts"_
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