The taxablity of income earned abroad – in countries that have tax agreements with India – has been a subject of considerable debate and controversy.
One recent case settled one aspect of this question, at least in regards to the tax agreement between India and Malaysia.
Section 5 of the Income Tax Act, 1961, states that the total income of any previous year of a person who is a resident includes all income from whatever source derived which is received or is deemed to be received in India in such year by or on behalf of such person; or accrues or arises or is deemed to accrue or arise to him in India during such year; or accres or arises to him outside India during such year.
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Sumes Dewan is a partner at KR Chawla & Co Advocates & Legal Consultants. The firm is headquartered in New Delhi and has offices in Chennai and Bangalore as well as a representative office in Singapore.
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