Income Tax Act

Official PDF pages 286–290

SOURCE PDF PAGE 286
(3) For the purposes of this section,—
( a )   “overseas financial organisation” means any fund, institution, association
or body, whether incorporated or not, established under the laws of a
country outside India,—
( i )   which has entered into an arrangement for investment in India with
any public sector bank or public financial institution or a mutual
fund specified in Schedule VII (Table: Sl. No. 20 or 21); and
( ii )   such arrangement is approved by the Securities and Exchange Board
of India, established under the Securities and Exchange Board of
India Act, 1992 (15 of 1992), for this purpose;
( b )   “public financial institution” shall have the same meaning as assigned
to it in section 2( 72 )   of the Companies Act, 2013 (18 of 2013);
( c )   “unit” means unit of,—
( i )   a mutual fund specified in Schedule VII (Table: Sl. No. 20 or 21);
or
( ii )   the Unit Trust of India.
Tax on income from bonds or Global Depository Receipts purchased in foreign
currency or capital gains arising from their transfer.
209.   (1) The income-tax payable, on the total income of an assessee, being a non-
resident, which includes income specified in column B of the Table below,
shall be the aggregate of income-tax computed at the rate specified in the column
C applied on the corresponding income specified in column B.
TABLE
Sl.
No.
Income   Rate of income-tax
payable
A   B   C
1.   From interest on—
( a )   bonds of an Indian company issued as per
such   scheme   as   may   be   notified   by   the
Central Government; or
( b )   bonds of a public sector company sold by the
Government,
and purchased in foreign currency.
10%
2.   From dividends on Global Depository Receipts—
( a )   issued as per such scheme as may be notified
by the Central Government against the initial
issue of shares of an Indian company and
purchased in foreign currency through an
approved intermediary; or
10%

──────────

SOURCE PDF PAGE 287
Sl.
No.
Income   Rate of income-tax
payable
A   B   C
( b )   issued against the shares of a public sector
company sold by the Government and pur -
chased by him in foreign currency through
an approved intermediary; or
( c )   issued or re-issued as per a scheme as may be
notified by the Central Government, against
the existing shares of an Indian company
purchased in foreign currency through an
approved intermediary.
3.   Long-term capital gains arising from the transfer
of bonds referred to against serial number 1 or
Global Depository Receipts referred to against
serial number 2.
12.5%
4.   Total income as reduced by income referred to
against serial numbers 1 to 3.
Rates in force.
(2) Where the gross total income of the non-resident—
( a )   consists only of income by way of interest or dividends in respect   of—
( i )   bonds referred to in sub-section (1) (Table: Sl. No. 1); or
( ii )   Global Depository Receipts referred to in sub-section (1) (Table:
Sl. No. 2),
no deduction shall be allowed under sections 28 to 58, 60 and 61 or
section 93(1)( a ) or ( e ) or under Chapter VIII;
( b )   includes any income referred to in sub-section (1) (Table: Sl. No. 1) to
(Table: Sl. No. 3),—
( i )   the gross total income shall be reduced by the such income; and
( ii )   the deduction under Chapter VIII shall be allowed as if the gross
total income so reduced, were the gross total income of the assessee.
(3) The provisions of section 72(6)   shall not apply for computation of long-term
capital gains arising out of the transfer of long-term capital asset being bonds or
Global Depository Receipts referred to in sub-section (1) (Table: Sl. No. 3).
(4) It shall not be necessary for a non-resident to furnish a return of his income
under section 263(1), if—
( a )   his total income during the tax year consisted only of income referred
to in sub-section (1) (Table: Sl. No. 1) and (Table: Sl. No. 2); and
( b )   the tax deductible at source under the provisions of Chapter XIX-B has
been deducted from such income.
(5) Where the assessee acquired Global Depository Receipts or bonds in an amal -
gamated or resulting company by virtue of his holding Global Depository Receipts
or bonds in the amalgamating or demerged company, as the case may be, as per

──────────

SOURCE PDF PAGE 288
the provisions of sub-section (1), the provisions of that sub-section shall apply to
such Global Depository Receipts or bonds.
(6) For the purposes of this section,—
( a )   “approved intermediary” means an intermediary which is approved as
per a scheme as may be notified by the Central Government; and
( b )   “Global Depository Receipts” shall have the meaning assigned to it in
section 193(4)( a ).
Tax on income of Foreign Institutional Investors from securities or capital
gains arising from their transfer.
210.   (1) The income-tax payable on the total income of an assessee, being a
specified fund or Foreign Institutional Investor, which includes income referred
to in column B of the Table below, shall be the aggregate of income-tax computed
at the rate specified in the column C applied on the corresponding income specified
in column B.
TABLE
Sl.
No.
Income   Rate of Income-tax
payable
A   B   C
1.   Income in respect of securities other than units referred
to in section 208.
( a )   20% in case of
Foreign Insti -
tutional Inves -
tor;
( b )   10% in case of
specified fund.
2.   Short-term capital gains (not being short-term capital
gains referred to in section 196) arising from the transfer
of such securities.
30%
3.   Short-term capital gains referred to in section 196
arising from the transfer of such securities.
20%
4.   Long-term capital gains (not being long-term capital
gains referred to in section 198 arising from the transfer
of such securities).
12.5%
5.   Long-term capital gains referred to in section 198
arising from the transfer of such securities which
exceeds   `   125000.
12.5%
6.   Total income as reduced by income referred to against
serial numbers 1 to 5.
Rates in force.
(2) In case of specified fund, provisions of this section shall apply only to the extent
of income that is attributable to units held by non-resident (not being a permanent
establishment of such non-resident in India) calculated in the manner as may be
prescribed, irrespective of the provisions of sub-section (1).

──────────

SOURCE PDF PAGE 289
(3) Irrespective of anything contained in sub-section (1), where the specified fund
is an investment division of an offshore banking unit, the provisions of this section
shall apply to the extent of income that is attributable to such investment division
referred to in clause ( g )( ii ) of Note 1 of the Table in Schedule VI as a Category-I
portfolio investor under the Securities and Exchange Board of India (Foreign Port -
folio Investors) Regulations, 2019 made under the Securities and Exchange Board
of India Act, 1992 (15 of 1992), calculated in such manner as may be prescribed.
(4) Where the gross total income of the specified fund or Foreign Institutional
Investor—
( a )   consists only of income in respect of securities referred in sub-section
(1) (Table: Sl. No. 1), no deduction shall be allowed to it under sections
28 to 58, 60 and 61 or section 93(1)( a ) or ( e )   or under Chapter VIII;
( b )   includes any income referred to in sub-section (1) (Table: Sl. No. 1) to
(Table: Sl. No. 5),—
( i )   the gross total income shall be reduced by the amount of such
income; and
( ii )   the deduction under Chapter VIII shall be allowed as if the gross
total income as so reduced, were the gross total income of the
specified fund or Foreign Institutional Investor.
(5) The provisions of section 72(6)   shall not apply for the computation of capital
gains arising out of the transfer of securities referred to in sub-section (1) (Table:
Sl. No. 2) to (Table: Sl. No. 5).
(6) For the purposes of this section,—
( a )   “Foreign Institutional Investor” means such investor as specified in a
notification by the Central Government;
( b )   “permanent establishment” shall have the meaning assigned to it in
section 173( c );
( c )   “securities” shall have the same meaning as assigned to it in section 2( h )
of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
( d )   “specified fund” shall have the meaning assigned to it in Schedule VI
[Note 1].
Tax on non-resident sportsmen or sports associations.
211.   (1) Where the total income of an assessee,—
( a )   being a sportsman (including an athlete), who is not a citizen of India
and is a non-resident, includes any income received or receivable by way
of—
( i )   participation in India in any game [other than a game the winnings
from which are taxable as specified in section 194(1) (Table: Sl. No.
1)] or sport; or
( ii )   advertisement; or
( iii )   contribution of articles relating to any game or sport in India in
newspapers, magazines or journals; or

──────────

SOURCE PDF PAGE 290
( b )   being a non-resident sports association or institution, includes any amount
guaranteed to be paid or payable to such association or institution in
relation to any game, other than a game the winnings from which are
taxable as specified in section 194(1) (Table: Sl. No. 1)   or sport played
in India; or
( c )   being an entertainer, who is not a citizen of India and is a non-resident,
includes any income received or receivable from his performance in
India,
then, the aggregate of income-tax payable by the assessee shall be computed at the
rate specified in the column C applied on the corresponding income specified in
column B:—
TABLE
Sl.
No.
Income   Rate of Income-
tax payable
A   B   C
1.   Income referred to in clause ( a ) or ( b ) or ( c ).   20%
2.   Total income as reduced by income referred to in clause
( a ) or ( b ) or ( c ).
Rates in force.
(2) No deduction in respect of any expenditure or allowance shall be allowed under
any provision of this Act in computing the income referred to in sub-section (1).
(3) It shall not be necessary for the assessee to furnish a return of his income under
section 263(1), if—
( a )   his total income during the tax year consisted only of income referred
to in sub-section (1); and
( b )   the tax deductible at source under the provisions of Chapter XIX-B has
been deducted from such income.
Interpretation.
212.   In sections 213 to 218,—
( a )   “foreign exchange asset” means any specified asset which the assessee
has acquired or purchased with, or subscribed to in, convertible foreign
exchange;
( b )   “investment income” means any income derived from a foreign exchange
asset;
( c )   “long-term capital gains” means income chargeable under the head
“Capital gains” relating to a capital asset, being a foreign exchange asset
which is not a short-term capital asset;
( d )   “non-resident Indian” means an individual, who is not a resident and
is—
( i )   a citizen of India; or
( ii )   a person of Indian origin;
( e )   “specified asset” means any of the following assets:—