Basis of Charge and Scope of Total
Basis of Charge and Scope of Total
Income
Sujith Surendran
CHARGE OF TAX
SECTION 4
1. Income tax is an annual Tax.
2. Income of the previous year is assessed to tax in
the assessment year at the rates applicable for that
assessment year.
3. Rate of Tax for an assessment year is fixed by the
Finance Act every year and not by the income tax
Act. If on a particular 1st. April of any assessment
year the Finance Act has not got the assent of the
president of India then for that assessment year the
rates as proposed in the Finance Bill or the rates
applicable to immediately preceding assessment
year , whichever is beneficial to the assessee will
apply until the new provision become effective.
Indian income
Foreign income
Indian Income
(i). Income which is received in India or deemed to be
received in India.
(ii). Income which is accrues or arises or deemed to
accrue or arise in India.
Foreign Income
Income which is accrues and arise outside India:Income under this head should naturally be an
Income which is not received in India also because if
it is received in India then it will become Indian
income by virtue of first condition of Indian Income
i.e. Income which is received in India or deemed to
be received in India.
6. Any Interest, Royalty and fees for Technical services :(a). Paid by Any state or Central Government.
(b). Paid by resident of India except in the condition
when used for business or profession carried on outside
India or for any source outside India.
Ex.:- Exis-2 company a Singapore based company has
been paid the following amount as technical services :(a). Government of India 10 Lakhs- Taxable
(b). Chennai based company has paid Rs. 12 lakhs (i).
Rs. 6 lakhs for project in India- Taxable. (ii). Rs. 6 Lakhs
for import of designs to be used for a project in UKNon- Taxable.
ROR
NOR
NR
Received in
India
Deemed to be
received in
India
Accrued in India Y
Deemed to be
accrued in India
Received and
Y
accrued outside
from business
controlled and
profession set
up in India
outside
India
Earned and
A normal view would be that if one nonresident sells shares of a foreign company to
another non-resident of India; and the
transaction takes place outside India, there
can be no tax on the same.
http://law.incometaxindia.gov.in/DIT/intDtaa.a
spx