Income-tax Act,1961
Act No : 43
Section :
Interest or dividend or other sims payable to Government, Reserve Bank or certain corporations.
2[196. Interest or dividend or other sums payable to Government, Reserve Bank or certain corporations Notwithstanding anything contained in the foregoing provisions of this Chapter, no deduction of tax shall be made by any person from any sums payable to- (i) the Government, or (ii) the Reserve Bank of India, or (iii) a corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income-tax on its income, or (iv) a Mutual Fund specified under clause (23D) of section 10, where such sum is payable to it by way of interest or dividend in respect of any securities or shares owned by it or in which it has full beneficial interest, or any other income accruing or arising to it.] ----------------------------------------------------------------------- 1 Inserted by the Finance Act, 1987, w.e.f. 1-6-1987. 2 Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Earlier, it was substituted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1967. ------------------------------------------------------------------------ 1.632 1[196A. Income in respect of units of non-residents, (1) Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any income in respect of units of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty per cent. (2) Notwithstanding anything contained in sub-section (1), no deduction of tax shall be made from any income payable in respect of units of the Unit Trust of India to a non-resident Indian or a non- resident Hindu undivided family, where the units have been acquired from the Unit Trust of India out of the funds in a Non-resident (External) Account maintained with any bank in India or by remittance of funds in foreign currency, in accordance, in either case, with the provisions of' the Foreign Exchange Regulation Act, 1973 (46 of 1973), and the rules made thereunder. Explanation.-For the purposes of this section- (a) "foreign currency" shall have the meaning assigned to it in the Foreign Exchange Regulation Act, 19733 (46 of 1973); (b) "non-resident Indian" shall have the meaning assigned to it in clause (e) of section 115C; ------------------------------------------------------------------------ 1 Substituted by the Finance Act, 1995, w.e.f. 1-7-1995. Prior to the substitution, section 196A, as substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989 and subsequently amended read as under: "196A. Tax not to be deducted from any income payable to unit- holders of Mutual Fund.-(1) Subject to the provisions of sub-section (2), no deduction of tax shall be made from any income payable in respect of units of a Mutual Fund, specified under clause (23D) of section 10, to its unit-holders being persons other than foreign ,companies. (2) Where any income referred to in sub-section (1) is payable to a unit-holder, being a foreign company, the person responsible for making the payment shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of *[twenty] per cent.] [(3) Notwithstanding anything contained in this Act. no deduction of tax shall be made from any income payable in respect of units issued under any scheme of the Unit ,Trust of India established under section 3 of the Unit Trust of India Act, 1963 (52 of 1963), to any institution or fund where such income is not liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (22) or clause (22A) or clause (23) or clause (23AA) or clause (23C) of section 10" *Substituted for "twenty-five" by the Finance Act, 1994, w.e.f. 1-6- 1994.
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