04 | CA Inter Income Tax Revision May 23 in English | Residential Status Part 2 | CA Prateek Bhadani

TL;DR

This video discusses the scope of total income based on residential status, explaining what is taxable for residents, non-residents, and not ordinarily residents, including income deemed to be received in India and income accruing or arising in India.

Transcript

hello everyone I hope that you all have written fine and let me tell you that I am completely fine as well in this video we are going to discuss part 2 of the residential status chapter in part one we had revised how to determine the residential status and in this part we are going to revise why we are determining residential status which is nothin... Read More

Key Insights

• 📏 The scope of total income is determined by residential status, with different rules for residents, non-residents, and not ordinarily residents.
• 🇮🇴 Income received in India, income deemed to be received in India, income accruing or arising in India, and income deemed to accrue or arise in India are considered Indian income.
• 🇮🇳 Business Connection in India is determined by various factors including dependent agents, significant economic presence, and exceptions for operations not in India.
• 🤱 Interest, royalty, and fee for technical service are subject to specific rules depending on the recipient and usage of the funds.

Questions & Answers

Q: What is the difference between a resident ordinarily resident and a resident not ordinarily resident?

A resident ordinarily resident is taxed on global income, while a resident not ordinarily resident is only taxed on Indian income and income from a business controlled or profession setup in India.

Q: What is Indian income?

Indian income includes income received in India, income deemed to be received in India, income accruing or arising in India, and income deemed to accrue or arise in India.

Q: What is the difference between income received in India and income deemed to be received in India?

Income received in India refers to income physically received within the country, while income deemed to be received in India includes contributions to recognized provident funds, interest on recognized provident funds, employer contributions in pension schemes under section 80ccd, and employer contributions and interest transferred from unrecognized provident funds to recognized provident funds.

Q: Are there any exceptions to the definition of Business Connection in India?

Yes, exceptions include operations not in India, collecting news or views in India for transmission outside India, shooting films in India by non-residents, foreign mining companies displaying rough diamonds in special notified zones in India, and certain types of transactions involving non-resident dependent agents.

Summary & Key Takeaways

• The scope of total income determines the taxable income for residents, non-residents, and not ordinarily residents.

• For a resident, ordinarily resident, global income is taxable. For a resident, not ordinarily resident, Indian income and income from a business controlled or profession setup in India are taxable.

• A non-resident's taxable income is limited to Indian income.