Income Tax Act, 2025
Section 1: Subs. by Act 27 of 1999, s. 5, for the Explanation (w.e.f. 12000).
1. Subs. by Act 27 of 1999, s. 5, for the Explanation (w.e.f. 12000).
60
(b) the rest period or leave period which is preceded and succeeded by services rendered in
India and forms part of the service contract of employment,
shall be regarded as income earned in India;]
(iii) income chargeable under the head “Salaries” payable by the Government to a citizen of India
for service outside India;
(iv) a dividend paid by an Indian company outside India;
1[(v) income by way of interest payable by—
(a) the Government; or
(b) a person who is a resident, except where the interest is payable in respect of any debt
incurred, or moneys borrowed and used, 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 interest is payable in respect of any debt
incurred, or moneys borrowed and used, for the purposes of a business or profession carried on
by such person in India ;
2[Explanation.—For the purposes of this clause,—
(a) it is hereby declared that in the case of a non-resident, being a person engaged in the
business of banking, any interest payable by the permanent establishment in India of such
non-resident to the head office or any permanent establishment or any other part of such
non-resident outside India shall be deemed to accrue or arise in India and shall be chargeable to
tax in addition to any income attributable to the permanent establishment in India and the
permanent establishment in India shall be deemed to be a person separate and independent of the
non-resident person of which it is a permanent establishment and the provisions of the Act
relating to 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
specification relating to any patent, invention, model, design, secret formula or process or trade
mark or similar property, if such income is payable in pursuance of an agreement made before the
1st day of April, 1976, and the agreement is approved by the Central Government:
the rest period or leave period which is preceded and succeeded by services rendered in
India and forms part of the service contract of employment,
shall be regarded as income earned in India;]
income chargeable under the head “Salaries” payable by the Government to a citizen of India
for service outside India;
a dividend paid by an Indian company outside India;
1[
income by way of interest payable by—
the Government; or
a person who is a resident, except where the interest is payable in respect of any debt
incurred, or moneys borrowed and used, 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
a person who is a non-resident, where the interest is payable in respect of any debt
incurred, or moneys borrowed and used, for the purposes of a business or profession carried on
by such person in India ;
2[Explanation.—For the purposes of this clause,—
it is hereby declared that in the case of a non-resident, being a person engaged in the
business of banking, any interest payable by the permanent establishment in India of such
non-resident to the head office or any permanent establishment or any other part of such
non-resident outside India shall be deemed to accrue or arise in India and shall be chargeable to
tax in addition to any income attributable to the permanent establishment in India and the
permanent establishment in India shall be deemed to be a person separate and independent of the
non-resident person of which it is a permanent establishment and the provisions of the Act
relating to computation of total income, determination of tax and collection and recovery shall
apply accordingly;
“permanent establishment” shall have the meaning assigned to it in clause
of
section 92F;]
income by way of royalty payable by—
the Government; or
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
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
specification relating to any patent, invention, model, design, secret formula or process or trade
mark or similar property, if such income is payable in pursuance of an agreement made before the
1st day of April, 1976, and the agreement is approved by the Central Government: