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Income Tax Laws – I

Notes 7. Income derived by a foreign company [Section 10(6b)]: Clause (6B) provides that where in
the case of non-resident (other than a company) or of a foreign company deriving income
(other than salary, royalty or fees for technical services) from Government or an Indian
concern in pursuance of an agreement entered into by the Central Government with the
Government of a foreign State or an international organisation, the tax on such income is
payable by Government or the Indian concern to the Central Government under the terms
of that agreement or any other related agreement approved by the Central Government,
the tax so paid shall be exempt. Finance Act, 2002 has provided that this exemption is not
available under Section 10(6A) if the agreement is entered into on or after 1.6.2002. In
other words, the exemption is available for the agreements entered into upto 31.5.2002
only.
8. Fees for technical services received by foreign companies [Section 10(6c)]: Clause (6C) grants
exemption to any income arising to the foreign companies notified by the Central
Government by way of royalty or fees for technical services received pursuant to an
agreement entered into with that Government for providing services in or outside India
in projects connected with security of India.
9. Foreign allowance [Section 10(7)]: Allowances or perquisites paid or allowed as such
outside India by the Central Government to a citizen of India for his services rendered
outside India, would be wholly exempt from income-tax.
10. Co-operative technical assistance programmes [Section 10(8)]: In the case of an individual
who is assigned duties in India in connection with co-operative technical assistance
programmes and projects in accordance with an agreement entered into by the Central
Government with the Government of a foreign State, the terms of which provide for the
exemption from tax, the remuneration received by the individual directly or indirectly
from the Government of that foreign State for such duties and any other income of such
individual which accrues or arises outside India (but is not deemed to accrue or arise in
India) and in respect of which such individual is required to pay any income- tax or social
security tax to the Government of that foreign State, would be exempt from income-tax.

11. Income of any member of the family [Section 10(9)]: The income of any member of the
family of any such individual referred to in the preceding Clauses 8, 8A & 8B of Section 10,
accompanying him to India which accrues or arises outside India and is not deemed to
accrue or arise in India, is also exempt from tax provided that the member is required to
pay any income-tax or social security tax to the Government of that foreign State on such
income or as the case may be to the country of origin of such member.
12. Death-cum-retirement gratuity [section 10(10)]: The amount of any death-cum-retirement
gratuity received under:
the revised pension rules of the Central Government; or
the Central Civil Services (Pension) Rules, 1972; or

any similar scheme applicable to (a), the members of civil services of the Union, or
(b) holders of posts connected with defence or of civil posts under the Union, or
(c) the member of All India Services, or (d) the members of civil services of a State,
or (e) holders of civil posts under a State, or (f) employees of a local authority, or
(g) Pension Code or Regulations applicable to the members of the defence services
is wholly exempt from tax under Section 10(10)(i) of the Act.

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