On 31st December, 2021, Miss Saroj paid a sum of 6,000 USD to Samarveera, a management consultant practicing in Tokyo (Japan), specializing in project financing. The payment was made in Japan. Samarveera is a non-residen

A non-resident is chargeable to tax in India with respect of income received outside India only if such income accrues or arises or is deemed to accrue or arise to him in India. Income deemed to accrue or arise in India under section 9 of the Income tax Act, 1961, comprises, inter alia, income by way of fees for technical services, which includes any consideration for rendering of any managerial, technical or consultancy services. Therefore, payment to a management consultant relating to project financing is covered within the scope of "fees for technical services". The Explanation below section 9(2) of the Income tax Act, 1961 clarifies that income by way of, inter alia, fees for technical services, from services utilized in India would be deemed to accrue or arise in India in case of a non-resident and be included in his total income, whether or not such services were rendered in India or whether or not the non-resident has a residence or place of business or business connection in India. In the instant case, since the services were utilized in India, the payment received by Samarveera, a non-resident, in Japan is chargeable to tax in his hands in India as it is deemed to accrue or arise in India.