The incidence of tax depends upon the residential status of an assessee. Discuss fully.
Tax Incidence of an Assessee:
The total income of an assessee will be different depending upon whether he is
- Resident,
- Not ordinarily resident,or
- Non-resident.
Section. 5 specifies the income which are chargeable to tax in different cases as follows:
Resident: A person who is Resident in India, shall be charged to tax in respect of the following incomes:
- Income received or deemed to be received in India in the previous year by or on behalf of such person; whether accrued or arisen in India or not, or
- Income accrued or arisen or deemed to accrue or arise to him in India during previous year, whether received in India or outside, or
- Income accrued or arisen outside India, during the previous year.
Not -Ordinarily Resident: The total income of a person who is a not ordinarily resident for the previous year includes all income from whatever
source derived which:
- Is received or is deemed to be received in India in the previous year by or on behalf of such person whether accrued or arisen within or outside India, or
- Accrues or arises or is deemed to accrue or arise to him in India during previous year whether received in India or outside India, or
- Accrues or arises to him outside India from a business controlled in or a profession set up in India.
Non -Resident: The total income of a person who is non-resident for the previous year includes all income from whatever source derived which:
- Is received or deemed to be received in India by or on behalf of such person whether accrued or arisen within or outside India, or
- Accrues or arises or is deemed to accrue or arise in India during previous year to him whether received in or outside India.
