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General Provisions

Non-resident




Meaning

As per sec. 2( 30 ) of the Income-tax Act, 1956, non-resident means a person who is not a resident, and for the purposes of sections 92, 93 and 168, includes a person who is not ordinarily resident within the meaning of sec. 6(6)

To become a resident in India , following conditions are required to be satisfied:

Assessee

Condition to be a Resident

Condition to be an Ordinarily resident

Individual

Assessee satisfies any one condition of sec. 6(1) i.e.

a) He is in India in the previous year for a period of 182 days or more; or

b) He is in India for a period of 60 days or more during the previous year and 365 days or more during 4 previous years immediately preceding the relevant previous year.

  

Exceptions

In the following cases, (b) is irrelevant:

  • An Indian citizen, who leaves India during the previous year for employment purpose.
  •   
  • An Indian citizen, who leaves India during the previous year as a member of crew of an Indian ship.
  •   
  • An Indian citizen or a person of Indian origin, who normally resides outside India , comes on a visit to India during the previous year.

Assessee satisfies both the conditions of sec. 6(6)

a) He has been resident in India in at least 2 out of 10 previous years immediately preceding the relevant previous year; and

b) He has resided in India for a period of 730 days or more during 7 previous years immediately preceding the relevant previous year.

HUF

Management is wholly or partly situated in India

Karta satisfies both the conditions of sec. 6(6)

Company



- Indian Co.

Always resident

Not applicable

- Other Co.

Management is wholly situated in India


Firm

Management is wholly or partly situated in India

  
  Not applicable
  

AOP

BOI

Other person

 

Tax-incidence on Non-resident

Following income of a non-resident is taxable in India :

  • Income received in India
  • Income earned or accrued in India
  • Income deemed to accrue or arise in India u/s 9.

Income deemed to be accrued in India [Sec. 9]

Following incomes are deemed to accrue or arise in India :

  • Income from business arising through business connection in India
  • Income from any property/asset if such property/asset is located in India
  • Income on transfer of a capital asset situated in India
  • Income from salaries (including salary for rest period or leave period), if service is rendered in India
  • Income from salaries received from the Government by an Indian citizen for services rendered outside India
  • Income from dividend paid by an Indian company even though such dividend is received outside India
  • Income from interest payable by the Government or by any other person in certain circumstances
  • Income by way of royalty payable by the Government or by any other person in certain circumstances 
  • Income by way of fees for technical services payable by the Government or by any other person in certain circumstances

However, following income shall not be considered as income accrued in India :

  1. Business activity confined to purchase of goods: In the case of a non-resident, no income shall be deemed to accrue or arise in India to him from operations, which are confined to the purchase of goods in India for the purpose of export. 
  2.  
  3. Business activity of a news agency confined to collection of news, etc .: In the case of a non-resident, being a person engaged in the business of running a news agency or of publishing newspaper, magazines or journals, no income shall be deemed to accrue or arise in India to him through or from activities, which are confined to the collection of news and views in India for transmission out of India.
  4.  
  5. Business activity confined to shooting: In the case of a non-resident, being -

- An individual who is not a citizen of India ; or

- A firm which does not have any partner, who is a citizen of India or who is resident in India ; or

- A company, which does not have any shareholder who is a citizen of or resident in India ;

no income shall be deemed to accrue or arise in India through or from operations, which are confined to the shooting of any cinematography film in India .


Tax Rates (General) for A.Y. 2010-11 (i.e. applicable for income earned or received during the F.Y. 2009-10)

For Individual

Total Income Range

Rates of Income Tax

Up to Rs.160000

Nil

Rs.160001 to Rs.300000

10% of the amount by which the total income exceeds Rs.160000

Rs.300001 to Rs.500000

Rs.14000 + 20% of the amount by which the total income exceeds Rs.300000

Rs.500001 and above

Rs.54000 + 30% of the amount by which total income exceeds Rs.500000

 

The tax as computed above is further increased by education cess and Secondary and Higher Education Cess (SHEC) @ 3% of computed tax.


Tax Rates (General) for A.Y. 2011-12 (i.e. applicable for income earned or received during the F.Y. 2010-11)

For Individual

Total Income Range

Rates of Income Tax

Up to Rs.160000

Nil

Rs.160001 to Rs.500000

10% of the amount by which the total income exceeds Rs.160000

Rs.500001 to Rs.800000

Rs.34000 + 20% of the amount by which the total income exceeds Rs.500000

Rs.800001 and above

Rs.94000 + 30% of the amount by which total income exceeds Rs.800000

    

The tax as computed above is further increased by education cess and Secondary and Higher Education Cess (SHEC) @ 3% of computed tax.

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For Company

Company
Rate

In the case of a domestic company

30%

In the case of a foreign company

40%

 

Surcharge for A.Y.2010-11: 10% (2.5% in case of foreign company) of income-tax (if total income exceeds Rs.1 crore otherwise Nil)

 

Surcharge for A.Y.2011-12: 7.5% (2.5% in case of foreign company) of income-tax (if total income exceeds Rs.1 crore otherwise Nil)

 

The tax and surcharge (if any) as computed above is further increased by education cess and Secondary and Higher Education Cess (SHEC) @ 3% of computed tax and surcharge.