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

Under section 174 of the Income-tax Act, 2025, which of the following is NOT, by itself, a ground for a person being deemed to have power to enjoy the income of a non-resident?

Mere residence in India with no connection to the income is not a ground. Section 174(6)(c) deems power to enjoy where the income benefits the person, raises his asset values, provides him benefits, gives him power of appointment or revocation, or lets him control its application.

  1. AThe person's mere residence in India with no connection to the incomeCorrect
  2. BThe person is able to control the application of the income directly or indirectly
  3. CThe receipt of the income increases the value of assets held by that person
  4. DThe person can obtain beneficial enjoyment through a power of appointment or revocation

Explanation

Section 174(6)(c) lists situations such as benefit enuring, increase in asset value, receipt of benefits, power of appointment or revocation, and control over application of income. Mere Indian residence without any such link is not listed, so it does not create power to enjoy.

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