Mr. X, a non-resident, earned ₹ 36,000 as interest on German Development Bonds. Of this, he received one-sixth in India. The amount to be included as interest for the computation of his Gross Total Income is
₹ 6,000
Under Section 5(2) of the Income-tax Act, 1961, a non-resident is taxed only on income that is received or deemed to be received in India, or that accrues or arises (or is deemed to accrue or arise) in India.
Interest on German Development Bonds accrues outside India. So the part received outside India is not taxable in the hands of a non-resident; only the part received in India enters his total income.
Amount received in India: \( \frac{1}{6} \times 36{,}000 = 6{,}000 \). The remaining \( 36{,}000 - 6{,}000 = 30{,}000 \) was received abroad and is excluded.
(Had Mr. X been resident and ordinarily resident, the whole ₹ 36,000 would be included; nil would be wrong because receipt in India attracts tax for every assessee.)
Hence, ₹ 6,000.
Similar Questions
Rental income received by a foreign individual, from another foreign individual, in respect of the property situated in Delhi is taxable in the hands of :
Consider the following conditions :
(a) An individual is in India for a period of 182 days in the financial year in which he is getting his salary income.
(b) An individual is in India for a period of 60 days or more during financial year in which he gets his salary and 365 days or more during 4 years immediately preceding to that financial year.
If one of the above conditions is satisfied, as per the provisions of Income Tax Act, 1961, he is :
Important Questions from Residential Status
Residential status in Indian Income Tax Act is determined for which one of the following?
- Which of the following statements is correct?
A. If a company is an Indian company, it will automatically be considered a domestic company.
B. A foreign company means a company that is not a domestic company.
C. The residential status of an Indian company can be non-resident in India.
D. The residential status of a foreign company can never be resident in India.
E. The foreign income of a resident company in India is taxable.
Choose the correct answer from the options given below: Rental income received by a foreign individual, from another foreign individual, in respect of the property situated in Delhi is taxable in the hands of :
Consider the following conditions :
(a) An individual is in India for a period of 182 days in the financial year in which he is getting his salary income.
(b) An individual is in India for a period of 60 days or more during financial year in which he gets his salary and 365 days or more during 4 years immediately preceding to that financial year.
If one of the above conditions is satisfied, as per the provisions of Income Tax Act, 1961, he is :
