TMI BlogIncome deemed to accrue or arise in IndiaX X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of export ; 3 [ * * * ] 4 [ ( c ) in the case of a non-resident, being a person engaged in the business of running a news agency or of publishing newspapers, 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 ;] 5 [ ( d ) in the case of a non-resident, being- ( 1 ) an individual who is not a citizen of India ; or ( 2 ) a firm which does not have any partner who is a citizen of India or who is resident in India ; or ( 3 ) a company which does not have any shareholder who is a citizen of India or who is resident in India, no income shall be deemed to accrue or arise in India to such individual, firm or company through or from operations which are confined to the shooting of any cinematograph film in India .] 23 [ (e) in the case of a foreign company engaged in the business of mining of diamonds, no income shall be deemed to accrue or arise in India to it through or from the activities which are confined to the display of uncut and unassorted diamond in any special zone notified by the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of any goods, services or property carried out by a non-resident with any person in India including provision of download of data or software in India, if the aggregate of payments arising from such transaction or transactions during the previous year exceeds such amount as may be prescribed; or (b) systematic and continuous soliciting of business activities or engaging in interaction with such number of users in India, as may be prescribed: Provided that the transactions or activities shall constitute significant economic presence in India, whether or not- (i) the agreement for such transactions or activities is entered in India; or (ii) the non-resident has a residence or place of business in India; or (iii) the non-resident renders services in India: Provided further that only so much of income as is attributable to the transactions or activities referred to in clause (a) or clause (b) shall be deemed to accrue or arise in India. ]] Explanation 3.- Where a business is carried on in India through a person referred to in clause ( a ) or clause ( b ) or clause ( c ) of Explanation 2 , only so much of income as is attributable to the operations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India Act,1992. . (15 of 1992.) ] 35 [Provided also that nothing contained in this Explanation shall apply to an asset or a capital asset, which is held by a non-resident by way of investment, directly or indirectly, in Category-I foreign portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, made under the Securities and Exchange Board of India Act, 1992. (15 of 1992.); ] 37 [Provided also that nothing contained in this Explanation shall apply to- (i) an assessment or reassessment to be made under section 143, section 144, section 147 or section 153A or section 153C; or (ii) an order to be passed enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154; or (iii) an order to be passed deeming a person to be an assessee in default under sub-section (1) of section 201, in respect of income accruing or arising through or from the transfer of an asset or a capital asset situate in India in consequence of the transfer of a share or interest in a company or entity registered or incorporated outside India made before the 28t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking, in such form and manner as may be prescribed, waiving his right, whether direct or indirect, to seek or pursue any remedy or any claim in relation to the said income which may otherwise be available to him under any law for the time being in force, in equity, under any statute or under any agreement entered into by India with any country or territory outside India, whether for protection of investment or otherwise; and (iv) such other conditions as may be prescribed. ] 21 [Explanation 6 .-For the purposes of this clause, it is hereby declared that- (a) the share or interest, referred to in Explanation 5, shall be deemed to derive its value substantially from the assets (whether tangible or intangible) located in India, if, on the specified date, the value of such assets- (i) exceeds the amount of ten crore rupees; and (ii) represents at least fifty per cent. of the value of all the assets owned by the company or entity, as the case may be; (b) the value of an asset shall be the fair market value as on the specified date, of such asset without reduction of liabilities, if any, in respect of the asset, determined in such manner as may be prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al or total interest, as the case may be, of such company or entity; or (ii) if such company or entity indirectly owns the assets situated in India and the transferor (whether individually or along with its associated enterprises), at any time in the twelve months preceding the date of transfer, neither holds the right of management or control in relation to such company or entity, nor holds any right in, or in relation to, such company or entity which would entitle him to the right of management or control in the company or entity that directly owns the assets situated in India, nor holds such percentage of voting power or share capital or interest in such company or entity which results in holding of (either individually or along with associated enterprises) a voting power or share capital or interest exceeding five per cent. of the total voting power or total share capital or total interest, as the case may be, of the company or entity that directly owns the assets situated in India; (b) in a case where all the assets owned, directly or indirectly, by a company or, as the case may be, an entity referred to in the Explanation 5, are not located in India, the income of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o computation of total income, determination of tax and collection and recovery shall apply accordingly; (b) permanent establishment shall have the meaning assigned to it in clause (iiia) of section 92F; ] ( vi ) income by way of royalty payable by- ( a ) the Government ; or ( b ) a person who is a resident, except where the royalty is payable in respect of any right, property or information used or services utilised for the purposes of a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or ( c ) a person who is a non-resident, where the royalty is payable in respect of any right, property or information used or services utilised for the purposes of a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India : Provided that nothing contained in this clause shall apply in relation to so much of the income by way of royalty as consists of lump sum consideration for the transfer outside India of, or the imparting of information outside India in respect of, any data, documentation, drawing or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property ; ( iii ) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property ; ( iv ) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill ; 12 [ ( iva ) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB; ] ( v ) the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting 36 [****] ; or ( vi ) the rendering of any services in connection with the activities referred to in sub-clauses ( i ) to 13 [ ( iv ), ( iva ) and ] ( v ). 14 [ Explanation 3. - For the purposes of this clause, computer software means any computer programme recorded on any disc, tape, perforated media or other information stor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. ] Explanation 17 [ 2 ] . - For the purposes of this clause, fees for technical services means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head Salaries . ] 38 [ (viii) income arising outside India, being any sum of money referred to in sub-clause (xviia) of clause (24) of section 2, paid by a person resident in India (a) on or after the 5th day of July, 2019 to a non-resident, not being a company, or to a foreign company; or (b) on or after the 1st day of April, 2023 to a person not ordinarily resident in India within the meaning of clause (6) of section 6. ] (2) Notwithstanding anything contained in sub-section (1), any pension payable outside India to a person residing permanently outside India shall not be deemed to accrue or arise in India, if the pension is payable to a person referred to in ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 12. Inserted by the Finance Act, 2001, w.e.f. 1-4-2002. 13. Inserted by the Finance Act, 2001, w.e.f. 1-4-2002. 14. Substituted by the Finance Act, 2000, w.e.f. 1-4-2001. Prior to its substitution, Explanation 3, as inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991, read as under : 'Explanation 3.- For the purposes of this clause, the expression computer software shall have the meaning assigned to it in clause (b) of the Explanation to section 80HHE;' 15. Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1977. 16. Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1977. 17. Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1977. 18. Inserted by the Finance Act, 2007, w.r.e.f. 1-6-1976. In section 9 of the Income-tax Act, for the Explanation occurring after sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence for this purpose, shall mean (a) transaction in respect of any goods, services or property carried out by a non-resident in India including provision of download of data or software in India, if the aggregate of payments arising from such transaction or transactions during the previous year exceeds such amount as may be prescribed; or (b) systematic and continuous soliciting of business activities or engaging in interaction with such number of users as may be prescribed, in India through digital means: Provided that the transactions or activities shall constitute significant economic presence in India, whether or not,- (i) the agreement for such transactions or activities is entered in India; (ii) the non-resident has a residence or place of business in India; or (iii) the non-resident renders services in India: Provided further that only so much of income as is attributable to the transactions or activities referred to in clause (a) or clause (b) shall be deemed to accrue or arise in India.] 31. Inserted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-04-2022 32. Inserted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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