Section 9- Income Deemed to Accrue or Arise in India

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The Income Tax Act, of 1961 is the main statute of Income Tax in India. It provides for levy, administration, collection, and recovery of Income Tax.

1). Following income is deemed to accrue or arise in India:

(i) Whether directly or indirectly, the income arising or accruing through or from any business, property, asset, or source of income or any money lent at interest and brought into cash in India.

As per this clause, the operations of the business which are not carried out in India, the income of the business deemed under this clause to accrue or arise in India can be only such part of the income as is reasonably attributable to the operations carried out in India. In the case of a non-resident, no income will be deemed to accrue or arise in India to him from the business or from the operations which are bound to the purchase of goods in India for the export purposes.

Also, the non-resident of India has no office or agency in India for the purpose of exports and the goods are not subjected to any kind of manufacturing process before being exported from India.

(ii) Income which falls under the head "Salaries", if it is earned in India;

(iii) Income chargeable under the head "Salaries" payable by the Government to a citizen of India for service outside India;

(iv) A dividend paid by an Indian company outside India.

2). Regardless anything contained in sub-section (1), if a person permanently residing outside India and the pension payable to that person will not be deemed to accrue or arise in India. But , if the pension is payable to a person referred to in article 314 of the Constitution or to a person who, having been appointed before the 15th day of August, 1947, to be a Judge of the Federal Court or of a High Court within the meaning of the Government of India Act, 1935, continues to serve on or after the commencement of the Constitution as a Judge in India.