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CMA Intermediate · Direct and Indirect Taxation · Residential Status and Scope of Total Income

Under the Income-tax Act, 2025, the total income of a non-resident for a tax year includes which of the following?

A non-resident is taxed on income received or deemed to be received in India, and on income that accrues or arises, or is deemed to do so, in India. Foreign income received abroad is outside the scope of the Act for such a person.

  1. AIncome that accrues outside India and is received outside India
  2. BIncome received or deemed to be received in India, or accruing or arising or deemed to accrue or arise in IndiaCorrect
  3. COnly income that accrues in India, even if it is received in India
  4. DAll income from any source, wherever it is earned

Explanation

Section 5(2) covers a non-resident's income that is received or deemed received in India, or accrues or arises or is deemed to accrue or arise in India. Income accruing and received outside India is excluded. Option 3 is wrong because receipt in India is an independent basis of charge.

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