Professional services in india by a non resident

Hey Sahil, great question about taxation of professional services by non-residents in India, excluding technical services under section 9(1)(vii).

Here’s a simplified take without considering DTAA or international treaties:

Income is taxable in India if it arises or is deemed to arise in India under Section 9 of the Income Tax Act.
For professional services (like actors, cricketers, engineers, lawyers) performed in India, the income is taxable even if the service provider is a non-resident.
If the services are rendered outside India, typically, the income will not be taxable in India (ignoring DTAA).

Business Connection (BC) under Section 9(1)(i) means a non-resident’s business or profession is carried on in India.
If a foreign firm or professional renders services from outside India but has a BC in India (like a branch office, agents, or other presence), the income attributable to the BC will be taxable.
If no BC exists, and the services are rendered outside India, generally, income won’t be taxable in India.
However, if services are performed physically in India, the income is taxable regardless of BC.

Foreign actor/cricketer performing in India: Income is taxable as it is earned through services physically rendered in India.
Foreign engineer/lawyer providing services remotely from outside India: Usually not taxable unless there is a business connection.
Foreign firm providing professional services in India through offices or employees in India: Taxable as it constitutes a business connection.

Scenario	Taxability in India (ignoring DTAA)
Services physically rendered in India by non-resident	Taxable in India (source-based)
Services rendered outside India by non-resident (no BC)	Not taxable in India
Foreign firm with business connection in India	Taxable on income attributable to BC
Foreign firm without business connection, services outside India	Not taxable

So, to answer your question:

If the foreign professional provides services in India, it’s taxable here directly.
If the services are performed outside India, but the foreign entity has a business connection, income attributable to that BC is taxable.
Without a business connection and services outside India, generally no Indian tax.