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CA Final · Direct Tax Laws & International Taxation · Non Resident Taxation

Under section 174 of the Income-tax Act, 2025, a person was taxed on income of a non-resident deemed to be his. He later receives that same income, whether as income or in another form. How is it treated?

It is not again deemed to form part of his income. Section 174(4) says that once a person has been charged to tax on income deemed to be his, later receipt of that income, in any form, is not taxed a second time.

  1. AIt is taxed again in the year of receipt as his income
  2. BIt is taxed again but at a concessional rate
  3. CIt is not again deemed to form part of his incomeCorrect
  4. DIt is taxed again only if received in a different form

Explanation

Section 174(4) provides that where a person has been charged to tax on income deemed to be his under the section and that income is subsequently received by him, whether as income or in any other form, it is not again deemed to form part of his income. This prevents double taxation.

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