Income which accrue or arise outside India & also received outside India is taxable in case of

Question

Income which accrue or arise outside India & also received outside India is taxable in case of

1. A. Resident and Ordinary Resident (Correct answer)
2. B. Resident but not Ordinary Resident
3. C. Non Resident
4. D. Resident and Ordinary Resident and Resident but not Ordinary Resident

Correct Answer

Option A — Resident and Ordinary Resident

Detailed Solution & Explanation

The correct answer is Resident and Ordinary Resident.

Key Points

• Income accrued AND received outside India is taxable ONLY for Resident and Ordinarily Resident (ROR) taxpayers.
• RNOR and Non-Residents are not taxed on such foreign income under the Income Tax Act.

Additional Information

• Residential status decides scope of income. A Resident and Ordinarily Resident is taxed on global income; an RNOR on Indian income plus foreign income from a business controlled in India; a Non-Resident only on income received or accruing in India.
• Basic residence test: 182 days in India during the year, or 60 days in the year plus 365 days in the preceding four.
• The additional tests for ordinary residence: resident in 2 of the preceding 10 years and present for 730 days in the preceding 7.
• Residential status is determined afresh each assessment year, and applies to the individual, not the income.