INCOME RECEIVED OR DEEMED TO BE RECEIVED IN INDIA

Question 1

Income deemed to be received in India:

Answer 1

In addition to the income actually received by the assessee or on his behalf, certain other incomes not actually received by the assessee and/or not received during the relevant
previous year, are also included in his total income for income tax purposes. Such incomes are known as income deemed to be received. Some of the examples of such income are:

(i) All sums deducted by way of taxes at source.
(ii) Incomes of other persons which are included in the income of the assessee i.e. clubbing provision.
(iii) The amount of unexplained or unrecorded investments.
(iv) The amount of unexplained or unrecorded moneys, etc.
(v) The annual accretion in the previous year to the balance standing at the credit of an employee participating in a Recognised Provident fund to the extent provided in Rule 6 of Part A of the Fourth Schedule [Section 7(i)]. (VI) The contributions made by the employer to Recognised Provident Fund in excess of 12% of the employees salary and the interest credited to the Provident Fund account of the employee in excess of the prescribed rate shall be included in the salary income of the employee. This amount is known as annual accretion.
(VII) The transferred balance in a Recognised Provident Fund to the extent provided in Rule 11(4) of Part A -Fourth Schedule [Section 7(ii)].
(VIII) Any dividend declared by a Company or distributed or paid by it within the meaning of Section 2(22) [Section 8(a)].
(VIII) Any interim dividend unconditionally made available by the Company to the member who is entitled to it [Section 8(b)].