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Microlesson · 5-min read

Income Deemed to Accrue or Arise in India – Section 9 Overview

## Section 9 – Income Deemed to Accrue or Arise in India

Certain incomes are deemed to accrue or arise in India even if they actually arise outside India. Such income is taxable in India for all categories of residents (ROR / RNOR / NR).

### Categories Covered by Section 9

ItemProvision
Income via Business Connection / Property / Asset / Source / Transfer of capital asset in IndiaSec 9(1)(i)
Salary earned for services rendered in IndiaSec 9(1)(ii)
Salary by Govt. of India to Indian citizen for services outside IndiaSec 9(1)(iii)
Dividend paid by an Indian Company outside IndiaSec 9(1)(iv)
Interest paid/payable to Non-ResidentSec 9(1)(v)
Royalty paid/payable to Non-ResidentSec 9(1)(vi)
Fees for Technical Services (FTS) to Non-ResidentSec 9(1)(vii)
Gift income > ₹50,000 to Non-Resident from ResidentSec 9(1)(viii)

### Section 9(1)(i): Income Through / From India

Any income accruing or arising to an assessee outside India is deemed to accrue or arise in India if it is — directly or indirectly — through or from:

Source
Any Business Connection in India
Any property in India
Any asset or source of income in India
Transfer of a capital asset situated in India

Worked example

### Example 1

Example: Mr. F, a non-resident, sells shares of an Indian Company (situated in India) outside India through a foreign broker.

Solution: Transfer of a capital asset situated in India → Income deemed to accrue/arise in India under Sec 9(1)(i) → Taxable in India even for NR.

⚠️ Common exam mistakes

  • Thinking Section 9 applies only to Non-Residents — it applies to all categories and is the gateway for NR taxation.
  • Ignoring 'indirect' transfer — assets/income through indirect routes are also covered.
  • Forgetting that Sec 9 income is included in 'Indian Income' and therefore taxable even for NR.
Bare-Act text Section 9(1)(i) · Income-tax Act, 1961 · click to expand
Section 9(1): The following incomes shall be deemed to accrue or arise in India — (i) all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India.
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