Chapter II of the Income-tax Act, 2025 — Basis of Charge

What this chapter does

Seven sections carry the whole weight of liability. Section 4 charges income-tax; section 5 fixes the scope of total income; section 6 decides residence; sections 7 to 9 pull in income that was never received in India at all — income deemed to be received, income deemed to accrue or arise here, and receipts by a specified person from a specified entity. Section 9 in particular is the gateway to almost every cross-border dispute, because it is what a treaty is then read against.

What to watch

• Residence under section 6 is decided before anything in Chapter IV is computed; getting the order wrong reverses the answer.
• Section 9 creates the charge; a tax treaty can only reduce it, never create one.

The sections in this chapter

• Section 4 — Charge of Income-tax
• Section 5 — Scope of total income
• Section 6 — Residence in India
• Section 7 — Income deemed to be received and dividend deemed to be income in a tax year
• Section 8 — Income on receipt of capital asset or stock-in-trade by specified person from specified entity
• Section 9 — Income deemed to accrue or arise in India
• Section 10 — Apportionment of income between spouses governed by Portuguese Civil Code