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CS Executive · Tax Laws and Practice · Income from Other Sources

Under the Income-tax Act, 2025, a non-resident, Ms. Fiona Clark, earns dividend income accruing outside India and the amount is received outside India. Only that income is considered. Which statement is correct about its inclusion in her total income?

Her income is not included in total income. A non-resident is taxed only on income received or deemed received in India, or accruing or arising in India. Foreign dividend received abroad meets neither test, and appearing in an Indian balance sheet does not change this.

  1. AIt is included because it is taken into account in a balance sheet prepared in India
  2. BIt is included because every person is taxed on global income
  3. CIt is included if she is a non-resident but an Indian citizen
  4. DIt is not included, as it neither accrues in India nor is received in IndiaCorrect

Explanation

A non-resident's total income covers only income received or deemed received in India, or accruing or deemed to accrue in India. Foreign-source income received abroad is outside this scope. Inclusion in a balance sheet prepared in India does not make it received in India.

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