# Salaries, Government Salary & Dividends Deemed to Accrue in India
## Salary for services rendered in India – Section 9(1)(ii)
- Salary for services rendered in India is deemed to accrue in India.
- Salary for a leave or rest period linked to services rendered in India is also deemed to accrue here — provided it forms part of the terms of the service contract.
> Rule of thumb: salary follows the place where service is rendered, not where it is paid.
## Government salary for services rendered outside India – Section 9(1)(iii)
- Salary payable by the Government of India to a citizen of India for services rendered outside India is deemed to accrue in India.
- The citizen may be resident or non-resident — it does not matter.
- If the recipient is not an Indian citizen, this section does not apply → such salary is not taxable in India.
- Exemption: Allowances and perquisites paid outside India by the Government are exempt under Section 10(7). (Only the basic salary is taxed.)
## Dividends – Section 9(1)(iv)
- Dividends paid by an Indian company outside India are deemed to accrue in India and are taxable in the hands of the shareholder.
## Quick comparison
| Provision | Condition | Deemed to accrue in India? |
|---|---|---|
| 9(1)(ii) | Service rendered in India | Yes |
| 9(1)(iii) | Govt salary to Indian citizen for service abroad | Yes (allowances/perks exempt u/s 10(7)) |
| 9(1)(iii) | Govt salary to non-citizen | No |
| 9(1)(iv) | Dividend by Indian company paid abroad | Yes |