Chapter: 1.1.4 Common Definations

Total Income: As per S.2(45) ,'total income' means the total amount of income referred to in S.5, computed in the manner laid down under this Act.

Scope of total income:

(1) The scope of total income as per sec. 5 of any previous year of a person who is resident includes all income from whatever source derived which:

(a)    is received or is deemed to be received in India in such year by or on behalf of such person or
(b)    Accrues or arises or is deemed to accrue or arise to him in India during . such Year or
(c)    Accrues or arises to him outside India during such year

(2) Subject to the provisions of this act total income of any previous year of the person who is non - resident includes an income from whatever source derived which:

(a)    Is received or deemed to be received in India in such year by or on behalf of such person or
(b)    Accrues or arises or is deemed to ague or arise to him in India during such year

S.5 of the Act deals with Scope of total income U /S 5 (1) the total income of any PY of a person who is a resident, is fully taxable under the Act, whether yt the same accrues or arises in India or outside India. In other words all the income of a person, who is resident in India, is liable to tax under the Act irrespective of the fact whether the same is earned in India or outside India.

However, as per proviso to S. 5 (1) in the case of a person who is resident but not ordinarily resident (R but NOR) in India, the income, which accrues or arises to him outside India, shall not be included in the total income unless it is derived from a business controlled in or a profession set up in India.

As per S.5 (2) the total income of any PY of a person who is a non - resident (NR) includes only the income which accrues or arises to him in India. In other words, in case of a non - resident only income accrued or received in India liable to tax under the IT Act.

Thus it is clear that in the case of a person who is NR or R but NOR In India) any income earned by him outside India is not liable to tax under the 11 Act.

Income 52 (24)

Income Includes

I Profits & Gains
II Dividend
III The value of any perquisite or profit in lieu of salary taxable under. Classes (2) & (3) of Sec. 17
V IV Any special allowance

Income from Lottery, crossword puzzles, Races Gambling & Betting