Section 9 ITA 1961 prescribes when INCOME is DEEMED to ACCRUE OR ARISE…

Question

Section 9 ITA 1961 prescribes when INCOME is DEEMED to ACCRUE OR ARISE in India for non-residents. It includes:

Accepted Answer

B.

1. Section 9 Income Tax Act 1961 deems certain INCOMES to ACCRUE OR ARISE in INDIA — relevant for taxation of NON-RESIDENTS and ROR who have foreign-source income.
2. CATEGORIES (Section 9(1)):
3. (i) BUSINESS CONNECTION in India (defined widely; includes SIGNIFICANT ECONOMIC PRESENCE — Section 9(1)(i) Explanation 2A);
4. (ii) Income from PROPERTY in India;
5. (iii) ASSET or SOURCE OF INCOME in India;
6. (iv) TRANSFER of CAPITAL ASSET situated in India (including indirect transfer if shares/interest derives substantial value from Indian assets);
7. (v) SALARY — earned in India for services rendered in India;
8. (vi) DIVIDEND paid by Indian company;
9. (vii) INTEREST paid by Govt/resident for borrowings outside India for business in India;
10. (viii) ROYALTY paid by Govt/resident (with exceptions);
11. (ix) FEES FOR TECHNICAL SERVICES paid by Govt/resident;
12. (x) BUSINESS INCOME of a non-resident through PE (with relevant DTAA modifications).
13. The SOURCE RULE under Section 9 is modified by DTAAs in many cases.
14. Hence option B is correct.
_Source: CS Executive Paper 4 Tax Laws (ICSI BoS) + Income Tax Act 1961 + CGST Act 2017 — Income Tax Act 1961, Section 9_