Residential Status under Income-tax Act and its Effect on Tax Incidence
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Table of Contents
1. What is the relevance of residential status
2. What one must know for deciding residential status
3. How to determine residential status of an individual [Sec. 6]
4. How to find out residential status of a Hindu undivided family
5. How to determine residential status of firm and association of persons
6. How to find out residential status of a company
7. How to determine residential status of every other person
8. What is the relationship between residential status and incidence of tax [Sec. 5]
11. What is income deemed to accrue or arise in India
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1. What is the relevance of residential status?
Tax liability of an assessee depends upon his residential status. Suppose an individual generates some income outside India. He is an Indian citizen. To find out whether his foreign income is taxable in India, one has to determine his “residential status” under the provisions of Income-tax Act. Likewise, whether an income earned by a foreign national in India (or outside India) is taxable in India, depends on the residential status of the individual, rather than on his citizenship. Therefore, the determination of the residential status of a person is very significant in order to find out his tax liability.
1.1 Relationship between residential status and tax liability in brief
There are two types of taxpayers – resident in India and non-resident in India. Indian income is taxable in India whether the person earning income is resident or non-resident. Conversely, foreign income of a person is taxable in India only if such person is resident in India. Foreign income of a non-resident is not taxable in India.
Dive Deeper:
All-About the Residential Status under the Income-tax Act
2. What one must know for deciding residential status?
The following norms one has to keep in mind while deciding residential status of an assessee :
- Different taxable entities – All taxable entities are divided in the following categories for the purpose of determining residential status :
a. an individual ;
b. a Hindu undivided family ;
c. a firm or an association of persons ;
d. a joint stock company ; and
e. every other person.
- Different residential status – An assessee is either : (a) resident in India, or (b) non-resident in India. However, a resident individual or a Hindu undivided family has to be (a) resident and ordinarily resident, or (b) resident but not ordinarily resident. Therefore, an individual and a Hindu undivided family can either be :
a. resident and ordinarily resident in India ; or
b. resident but not ordinarily resident in India ; or
c. non-resident in India
All other assessees (viz., a firm, an association of persons, a joint stock company and every other person) can either be :
a. resident in India ; or
b. non-resident in India.
The table given below highlights the same—
- Residential status for each previous year – Residential status of an assessee is to be determined in respect of each previous year as it may vary from previous year to previous year.
- Different residential status for different previous years in same assessment year not possible – If a person is resident in a previous year relevant to an assessment year in respect of any source of income, he shall be deemed to be resident in India in the previous year(s) relevant to the same assessment year in respect of each of his other sources of income [sec. 6(5)].
- Different residential status for different assessment years – An assessee may enjoy different residential status for different assessment years. For instance, an individual who has been regularly assessed as resident and ordinarily resident has to be treated as non-resident in a particular assessment year if he satisfies none of the conditions of section 6(1) in that year.
- Resident in India and abroad – It is not necessary that a person who is “resident” in India, cannot become “resident” in any other country for the same assessment year. A person may be resident in two (or more) countries at the same time. It is, therefore, not necessary that a person who is resident in India will be non-resident in all other countries for the same assessment year.
3. How to determine the residential status of an individual? [Sec. 6]
An individual may be (a) resident and ordinarily resident in India, (b) resident but not ordinarily resident in India, or (c) non-resident in India.
3.1 Resident and ordinarily resident [Sec. 6(1), 6(6)(a)]
To find out whether an individual is “resident and ordinarily resident” in India, one has to proceed as follows—
| Step 1 | First find out whether such individual is “resident” in India. | See para 3.1.1 |
| Step 2 | If such individual is “resident” in India, then find out whether he is “ordinarily resident” in India. However, if such individual is a “non-resident” in India, then no further investigation is necessary. | See para 3.1.2 |
3.1.1 Basic conditions to test as to when an individual is resident in India
Under section 6(1) an individual is said to be resident in India in any previous year, if he satisfies at least one of the following basic conditions—
| Basic condition (a) | He is in India in the previous year for a period of 182 days or more† |
| Basic condition (b) | He is in India for a period of 60 days or more during the previous year and 365 days or more during 4 years immediately preceding the previous year |
3.1.1a Exceptions
The aforesaid rule of residence is subject to the following exceptions—
- Exception one (Special Case 1) – In Special Case 1, the period of “60 days” referred to in Basic condition (b) above has been extended to 182 days by virtue of Explanation 1(a) to section 6(1). However, Special Case 1 is available only in the case of an Indian citizen who leaves India during the previous year for the purpose of employment outside India or an Indian citizen who leaves India during the previous year as a member of the crew of an Indian ship. For this purpose, the requirement is not leaving India for taking employment outside India but leaving India for the purposes of employment (the employment may be in India or may be outside India). To put it differently, the individual need not be an unemployed person. He may be employed in India and leave India during the previous year on a foreign assignment of his employer company. Alternatively, he may be an unemployed person who goes outside India to take an employment outside India.
In Special Case 1, an individual will be resident in India only if he is in India during the relevant previous year for at least 182 days‡.
- Exception two (Special Case 2) – In Special Case 2, the period of “60 days” referred to in Basic condition (b) above has been extended to 182 days by virtue of Explanation 1(b) to section 6(1). However, Special Case 2 covers only an Indian citizen or a person of Indian origin who comes on a visit to India during the previous year. A person is deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India. It may be noted that grand-parents include both maternal and paternal grand-parents.
In Special Case 2, an individual will be resident in India only if he is in India during the relevant previous year for at least 182 days‡.
- Exception three – Exception three is given by section 6(1A). For this exception, see para 3.3.1.
3.1.2 Additional conditions to test as to when a resident individual is ordinarily resident in India
Under section 6(6), a resident individual is treated as “resident and ordinarily resident” in India if he satisfies the following two additional conditions —
| Additional condition (i) | He has been resident† in India in at least 2 out of 10 previous years immediately preceding the relevant previous year. |
| Additional condition (ii) | He has been in India for a period of 730 days or more during 7 years immediately preceding the relevant previous year. |
In brief it can be said that an individual becomes resident and ordinarily resident in India if he satisfies at least one of the basic conditions [i.e., (a) or (b)] and the two additional conditions [i.e., (i) and (ii)].
3.1.3 Other Points
It is worthwhile to note the following propositions –
- It is not essential that the stay should be at the same place. It is equally not necessary that the stay should be continuous. Similarly, the place of stay or the purpose of stay is not material.
- Where a person is in India only for a part of a day, the calculation of physical presence in India in respect of such broken period should be made on an hourly basis. A total of 24 hours of stay spread over a number of days is to be counted as being equivalent to the stay of one day. If, however, data is not available to calculate the period of stay of an individual in India in terms of hours, then the day on which he enters India as well as the day on which he leaves India shall be taken into account as stay of the individual in India.
3.2 Resident but not ordinarily resident [Sec. 6(1), (6)(a)]
An individual who satisfies at least one of the basic conditions [i.e., condition (a) or (b) mentioned in para 3.1.1] but does not satisfy the two additional conditions [i.e., conditions (i) and (ii) mentioned in para 3.1.2], is treated as a resident but not ordinarily resident in India. In other words, an individual becomes resident but not ordinarily resident in India in any of the following circumstances :
| Case 1 | If he satisfies at least one of the basic conditions [i.e., condition (a) or (b) of para 3.1.1] but none of the additional conditions [i.e., (i) and (ii) of para 3.1.2] |
| Case 2 | If he satisfies at least one of the basic conditions [i.e., condition (a) or (b) of para 3.1.1] and one of the two additional conditions [i.e., (i) and (ii) of para 3.1.2] |
3.3 Non-resident
An individual is a non-resident in India if he satisfies none of the basic conditions [i.e., condition (a) or (b)]. In the case of non-resident, additional conditions are not relevant.
3.3.1 Exceptions
Even if an individual satisfies none of the two basic conditions, he is deemed to be resident but not ordinarily resident in the cases given below –
- First exception – This exception is given under section 6(1A) read with section 6(6)(d) and applicable from the assessment year 2021-22. Under this exception an individual shall be deemed to be resident but not ordinarily resident in India, if he satisfies the following 3 conditions –
a. he is an Indian citizen;
b. his total income (other than the income from foreign sources) exceeds Rs. 15,00,000#during the relevant previous year, and
c. he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature.
The rule given by above exception is not applicable in the case of an individual who becomes resident in India by satisfying any of the basic conditions given by section 6(1) [see para 3.1]. Moreover, the above exception is not applicable in the case of a foreign citizen (even if he is a person of Indian origin).
- Second exception – This exception is given by section 6(6)(c) read with Explanation 1(b) to section 6(1) and applicable from the assessment year 2021-22. Under this exception, an individual shall be deemed to be resident but not ordinarily resident in India if he satisfies the following 4 conditions –
a. he is an Indian citizen or a person of Indian origin;
b. his total income (other than the income from foreign sources) exceeds Rs. 15,00,000#during the relevant previous year;
c. he comes to India on a visit during the relevant previous year, and
d. he is in India for 120 days (or more but less than 182 days) during the relevant previous year and 365 days (or more) during 4 years immediately preceding the relevant previous year.
3.3.1a Other Points
For the aforesaid two exceptions, the following should be kept in view –
- How to find out total income of Rs. 15,00,000 – Total income for the ceiling of Rs. 15,00,000 is calculated after ignoring income from foreign sources. “Income from foreign sources” means income which accrues or arises outside India (except income derived from a business controlled in or a profession set up in India). Income which is deemed to accrue or arise in India shall be included in computation of the ceiling of Rs. 15,00,000.
- Liable to tax – “Liable to tax” (in relation to a person and with reference to a country) means that there is an income-tax liability on such person under the law of that country for the time being in force and shall include a person who has subsequently being exempted from such liability under the law of that country.
- Person of Indian origin – A person is deemed to be of Indian origin if he, or either of his parents or any of his grandparents, was born in undivided India.
3.4 Rule of residence for an individual in brief –
The table given below summarises the rule of residence –
| Who is resident and ordinarily resident in India | He must satisfy at least one of the basic conditions [i.e., (a) and/or (b)]. At the same time, he should also satisfy the two additional conditions. |
| Who is resident but not ordinarily resident in India | He must satisfy at least one of the basic conditions [i.e., (a) and/or (b)]. He may satisfy one or none of the additional conditions. |
| Who is non-resident resident in India | He satisfies none of the basic conditions [i.e., he does not satisfy basic condition (a) and basic condition (b)]. Additional conditions are not relevant in the case of a non-resident. |
Note – Besides the provisions summarised in the above table, an individual becomes resident but not ordinarily resident in India if he comes within the two exceptions mentioned in para 3.3.1.
4. How to find out the residential status of a Hindu undivided family?
A Hindu undivided family (like an individual) is either resident in India or non-resident in India. A resident Hindu undivided family is either ordinarily resident or not ordinarily resident.
4.1 When a Hindu undivided family is resident or non-resident
A Hindu undivided family is said to be resident in India if control and management of its affairs is wholly or partly situated in India. A Hindu undivided family is non-resident in India if control and management of its affairs is wholly situated outside India.
The table given below highlights the same proposition —
| Place of control | Residential status of family | Ordinarily resident or not |
| Control and management of the affairs of a Hindu undivided family is— | ||
|
Resident | See para 4.2 |
|
Non-resident | — |
|
Resident | See para 4.2 |
In order to determine whether a Hindu undivided family is resident or non-resident, the residential status of the karta of the family during the previous year is not relevant. Residential status of the karta during the preceding years is considered for determining whether a resident family is “ordinarily resident”.
- What is “control and management” – Control and management is situated at a place where the head, the seat and the directing power are situated. The mere fact that the family has a house in India, where some of its members reside or the karta is in India in the previous year, does not constitute that place as the seat of control and management of the affairs of the family unless the decisions concerning the affairs of the family are taken at that place.
4.2 When a resident Hindu undivided family is ordinarily resident in India
A resident Hindu undivided family is an ordinarily resident in India if karta or manager of the family (including successive kartas) satisfies the following two additional conditions as laid down by section 6(6)(b) :
| Additional condition (i) | Karta has been resident in India in at least 2 out of 10 previous years [according to the basic condition mentioned in para 3.1.1] immediately preceding the relevant previous year |
| Additional condition (ii) | Karta has been present in India for a period of 730 days or more during 7 years immediately preceding the previous year |
If karta or manager of a resident Hindu undivided family does not satisfy the two additional conditions, the family is treated as resident but not ordinarily resident in India.
5. How to determine the residential status of the firm and association of persons?
A partnership firm and an association of persons are said to be resident in India if control and management of their affairs are wholly or partly situated within India during the relevant previous year. They are, however, treated as non-resident in India if control and management of their affairs are situated wholly outside India.
The above rule may be summarised as follows—
| Place of control | Residential status |
| Control and management of the affairs of a firm/association of persons is— | |
|
Resident |
|
Non-resident |
|
Resident |
A firm/an association of persons cannot be “ordinarily” or “not ordinarily resident”. The residential status of the partners/members of the firm/association is not relevant in determining the status of the firm/association.
6. How to find out the residential status of a company?
Residential status of a company is determined as follows –
| Section | Company | Residential status |
| 6(3)(i) | Indian company | Always resident in India |
| 6(3)(ii) | A foreign company (whose turnover/gross receipt in the previous year is more than Rs. 50 crore) | It will be resident in India if its place of effective management (POEM), during the relevant previous year, is in India |
| 6(3)(ii) | A foreign company (whose turnover/gross receipt in the previous year is Rs. 50 crore or less) | Always non-resident in India |
7. How to determine the residential status of every other person?
Every other person is resident in India if control and management of its affairs is, wholly or partly, situated within India during the relevant previous year. On the other hand, every other person is non-resident in India if control and management of its affairs is wholly situated outside India.
8. What is the relationship between residential status and incidence of tax? [Sec. 5]
Under the Act, incidence of tax on a taxpayer depends on his residential status and also on the place and time of accrual or receipt of income.
8.1 Indian income and foreign income
In order to understand the relationship between residential status and tax liability, one must understand the meaning of “Indian income” and “foreign income”.
8.1.1 Indian income
Any of the following three is an Indian income—
- If income is received (or deemed to be received) in India during the previous year and at the same time it accrues (or arises or is deemed to accrue or arise) in India during the previous year.
- If income is received (or deemed to be received) in India during the previous year but it accrues (or arises) outside India during the previous year.
- If income is received outside India during the previous year but it accrues (or arises or is deemed to accrue or arise) in India during the previous year.
8.1.2 Foreign income
If the following two conditions are satisfied, then such income is “foreign income”—
- income is not received (or not deemed to be received) in India; and
- income does not accrue or arise (or does not deemed to accrue or arise) in India†.
8.2 Incidence of tax for different taxpayers
Tax incidence of different taxpayers is as follows—
| Individual and Hindu undivided family | |||
| Resident and ordinarily resident in India | Resident but not ordinarily resident in India | Non-resident in India | |
|
Taxable in India | Taxable in India | Taxable in India |
|
Taxable in India | Only two types of foreign incomes | Not taxable in India |
| (i.e., Case 1 and Case 2 given below) are taxable in India | |||
| Any other foreign income is not taxable in India | |||
The following foreign incomes are taxable in the hands of a resident but not ordinarily resident in India—
Case 1 – If it is business income and business is controlled wholly or partly from India.
Case 2 – If it is income from a profession which is set up in India.
No other foreign income (like salary, rent, interest, etc.) is taxable in India in the hands of a resident but not ordinarily resident taxpayer.
| Any other taxpayer (like company, firm, co-operative society, association of persons, body of individual, etc.) | ||
| Resident in India | Non-resident in India | |
| Indian income | Taxable in India | Taxable in India |
| Foreign income | Taxable in India | Not taxable in India |
8.3 Conclusions
The following broad conclusions can be drawn—
- Indian income – Indian income is always taxable in India irrespective of the residential status of the taxpayer.
- Foreign income – Foreign income is taxable in the hands of resident (in case of a firm, an association of persons, a joint stock company and every other person) or resident and ordinarily resident (in case of an individual and a Hindu undivided family) in India. Foreign income is not taxable in the hands of non-resident in India.
In the hands of resident but not ordinarily resident taxpayer, foreign income is taxable only if it is (a) business income and business is controlled wholly or partly from India, or (b) professional income from a profession which is set up in India. In any other case, foreign income is not taxable in the hands of resident but not ordinarily resident taxpayers.
8.4 Provisions illustrated
Different situations are covered in the table given below —
| Nature of income | Reasons | Conclusions – Is it taxable in India for the assessment year 2022-23 | ||
| Resident* or resident and Ordinarily resident** | Resident but not ordinarily resident | Non-resident | ||
| 1. Rental income of Rs. 36,000 is received in India on May 10, 2021 (it may accrue outside India or in India) | It is Indian income. Indian income is always taxable | Yes | Yes | Yes |
| 2. Interest income of Rs. 46,000 accrues in India on March 31, 2022 (it may be received in India or outside India) | It is Indian income. Indian income is always taxable | Yes | Yes | Yes |
| 3. Income of Rs. 56,000 is deemed to be received in India on April 20, 2021 (it may accrue outside India or in India) | It is Indian income. Indian income is always taxable | Yes | Yes | Yes |
| 4. Income of Rs. 66,000 is deemed to accrue or arise in India during the previous year 2021-22 (it may be received in India or outside India) | It is Indian income. It is always taxable | Yes | Yes | Yes |
| 5. Business income/ professional income of Rs. 76,000 is received and accrued outside India during the previous year 2021-22 (business is controlled from outside India or profession is set up out-side India) | It is foreign income. It is taxable in the case of resident and ordinarily resident taxpayer. It is not taxable in the case of a non-resident. Since it is business/profession income and business is controlled from outside India or profession is set up outside India, it is not taxable in the case of resident but not ordinarily resident taxpayer | Yes | No | No |
| 6. In situation 5, suppose business is controlled from India or profession is set up in India | It is foreign income. Since it is business/professional income and the business is controlled from India or profession is set up in India, it is taxable in all cases except non-resident | Yes | Yes | No |
| 7. Rental income or salary income or interest income of Rs. 86,000 is received outside India in the previous year 2021-22 and at the same time it accrues or arises outside India | It is foreign income. It is taxable in the case of resident and ordinarily resident taxpayer. It is not taxable in the case of non-resident. Since it is foreign income which is neither business income nor professional income, it is not taxable in the case of resident but not ordinarily resident | Yes | No | No |
| 8. Gift† of Rs. 2 lakh received outside India by an individual on November 6, 2021 from a friend. | It is foreign income. It is taxable in the case of resident and ordinarily resident taxpayer. It is not taxable in the case of non-resident. Since it is foreign income which is neither business income nor professional income, is not taxable in the case of resident but not ordinarily resident | Yes | No | No |
| 9. Gift† of Rs. 1 lakh received in Delhi by an individual on November 30, 2021 from a friend | It is Indian income. It is taxable | Yes | Yes | Yes |
| 10. Income of Rs. 96,000 earned and received outside India in 2014-15 but later on remitted to India in 2021-22 | This income pertains to the previous year 2014-15. It cannot be taxed at the time of remittance in 2021-22 | No | No | No |
9. What is receipt of income
Income received in India is taxable in all cases irrespective of residential status of an assessee. The following points are worth mentioning in this respect:
9.1 Receipts vs. Remittance
The “receipt” of income refers to the first occasion when the recipient gets the money under his control. Once an amount is received as income, any remittance or transmission of the amount to another place does not result in “receipt” at the other place.
Provisions illustrated
An assessee receives $10,000 in USA on May 16, 2021. Out of $10,000, he remits Rs. 50,000 to India on May 18, 2021. In this case, income is “received” outside India on May 16, 2021.
9.2 Cash vs. Kind
It is not necessary that income should be received in cash. Income may be received in cash or in kind. For instance, value of a free residential house provided to an employee is taxable as salary in the hands of the employee though the income is not received in cash.
9.3 Receipt vs. Accrual
Receipt is not the sole test of chargeability to tax. If an income is not taxable on receipt basis, it may be taxable on accrual basis.
9.4 Actual receipt vs. Deemed receipt
It is not necessary that an income should be actually received in India in order to attract tax liability. An income deemed to be received in India in the previous year is also included in the taxable income of the assessee. The Act enumerates the following as income deemed to be received in India:
- Interest credited to recognised provident fund account of an employee in excess of 9.5 per cent.
- Excess contribution of employer in the case of recognised provident fund (i.e., the amount contributed in excess of 12 per cent of salary).
- Transfer balance.
- Contribution by the Central Government or any other employer to the account of an employee under a notified pension scheme referred to in section 80CCD.
- Tax deducted at source.
10. What is accrual of income?
Income accrued in India is chargeable to tax in all cases irrespective of residential status of an assessee. The words “accrue” and “arise” are used in contradistinction to the word “receive”. Income is said to be received when it reaches the assessee ; when the right to receive the income becomes vested in the assessee, it is said to accrue or arise.
11. What is income deemed to accrue or arise in India?
In some cases, income is deemed to accrue or arise in India under section 9 even though it may actually accrue or arise outside India. Section 9 applies to all assessees irrespective of their residential status and place of business. The categories of income which are deemed to accrue or arise in India are as under :
11.1 Income from business connection
The following conditions should be satisfied —
- Condition one – The taxpayer has a “business connection” in India.
- Condition two – By virtue of “business connection”† in India, income actually arises outside India.
If the above conditions are satisfied, income which arises outside India because of “business connection” in India, is deemed to accrue or arise in India.
11.2 Income through or from any property, asset or source of income in India
Income from any property, asset or source of income in India is deemed to accrue or arise in India. For instance, a property in Chennai is owned by X, a non-resident. It is given on rent. Rental income from the property is deemed to be earned in India in the hands of X. This rule is applicable even if rent is received outside India.
11.3 Income through the transfer of capital asset situated in India
Any capital gain earned by a person by transfer of any capital asset situated in India, is deemed to accrue or arise in India.
- An asset or a capital asset (being any share or interest in a company or entity registered or incorporated outside India) shall be deemed to be and shall always be deemed to have been situated in India if the share or interest derives, directly or indirectly, its value substantially from the assets located in India*.
11.4 Income under the head “Salaries”
If service is rendered in India, salary income is deemed to be earned in India†.
11.5 Salary payable abroad by the Government to a citizen of India
Salary received by an Indian citizen from the Government of India for rendering service outside India is deemed to accrue or arise in India. Such salary is taxable in the hands of concerned employee even if he is non-resident. However, allowances and perquisites received from the Government by an Indian citizen for rendering service outside India, are exempt from tax.
11.6 Dividend paid by an Indian company [Sec. 9(1)(iv)]
Dividend received by a shareholder from an Indian company is always deemed to accrue or arise in India.
11.7 Income by way of interest, royalty and technical fees
These are deemed to accrue or arise in India in the following cases –
- Interest, royalty or technical fees received from the Central Government/any State Government, is deemed to accrue or arise in India.
- Interest, royalty or technical fees received from a resident person is deemed to accrue or arise in India in the hands of recipient. However, this rule is not applicable (a) if borrowed money is utilised by the payer for carrying on a business/profession outside India or for earning any income outside India; or (b) payment of royalty/technical fees pertains to a business/profession carried on by the payer outside India or earning any income outside India.
- Interest, royalty or technical fees received from a non-resident, is deemed to accrue or arise in India in the hands of recipient, if (a) borrowed money is utilised by the payer for carrying on a business/profession in India; or (b) payment of royalty/technical fees pertains to a business/profession carried on by the payer in India or earning any income in India.
- Interest received outside India by a foreign bank from its branch in India – In the hands of recipient, income shall be deemed to accrue or arise in India.
- Meaning of royalty – Broadly the term “royalty” means consideration received or receivable for transfer of all or any right in respect of certain rights, property or information. It also includes consideration for transfer of all (or any) right for use (or right to use) a computer software (including granting of a licence) irrespective of the medium through which such right is transferred. Further, it includes consideration in respect of any right, property or information, whether or not—
a. the possession or control of such right, property or information is with the payer;
b. such right, property or information is used directly by the payer;
c. the location of such right, property or information is in India.
Moreover, it includes consideration for use of any patent, invention, model, secret formula or process. The expression “process” includes transmission by satellite (including up-linking, amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology, whether or not such process is secret.
11.8 Deemed accrual of gift of money to a non-resident/foreign company [Sec. 9(1)(viii)]
Clause (viii) has been inserted in section 9(1) by the Finance (No. 2) Act, 2019. This clause is applicable if the following conditions are satisfied –
- Payer is resident in India (or money is received from a person resident in India).
- Recipient is non-resident/foreign company. A sum of money is received by non-resident/foreign company on or after July 5, 2019.
If these conditions are satisfied, money received by the non-resident/foreign company, shall be deemed to accrue or arise in India (even if it is received outside India).
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