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Receipt vs remittance of income
In Icai study material final, in one illustration, rent from property in London deposited in a bank in London and subsequently remitted to India, has been taxed in the hands of resident and ordinarily resident in India for AY 18-19. Is this not inconsistent with the principle that "only first receipt must be taxed and remittance of income received must not be taxed in the hands of the subsequent receiver or at the subsequent place of remittance" ?
Replies (3)
Once you are a resident in India, your income earned or received anywhere in the world is taxable in India. You must include the income received in foreign in your income tax return that you will file in India. If any tax has been deducted by foreign country on this income, you can make use of the Double Taxation Avoidance Agreement (DTAA) so that your income is not doubly taxed.
agree with mr. sunil
Thanks Mr. Sunil. I understand that completely. But as per the 1961 Act, mere remittance is not income at all in the hands of the subsequent recipient in India. So, why must it be included in the total income computation and be taxed ? I find these two provisions conflicting. One provision says, remittance does not constitute receipt of income. The other provision says, it must be included in the income and taxed. How do I understand this?
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