Income-tax Act,1961
Act No : 43
Section :
Tax on capital gains in case of companies.
1[115. Tax on capital gains in case of companies.-Omitted by the Finance Act, 1987, w.e.f. 1-4-1988.] 2[115A. Tax on dividends, royalty and technical service fees in the case of foreign companies 3 4[(1 ) Where the total income of- ----------------------------------------------------------------------- 1 Prior to the omission, section 115, as substituted by the Finance (No. 2) Act, 1962, w.e.f. 1-4-1962; amended by the Finance Act, 1964, w.e.f. 1-4-1964; substituted by the Finance Act, 1965, w.e.f. 1-4- 1965; amended by the Finance Act, 1966, w.e.f. 1-4-1966; substituted by the Finance (No. 2) Act, 1971, w.e.f. 1-4-1972 and amended by the Finance (No. 2) Act, 1974, w.e.f. 1-4-1975; Finance Act, 1976, w.e.f. 1-4-1977 and the Finance Act, 1985, w.e.f. 1-4-1986, read as under: "115. Tax on capital gains in case of companies.-Where the total income of a company includes any income chargeable under the head "Capital gains" relating to capital assets other than short-term capital assets (such income being hereinafter referred to as long-term capital gains), the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated on the amount of long-term capital gains included in the total income- (a)on so much of the amount of such long-term capital gains as relate to buildings or lands or any rights in buildings or lands, at the rate of fifty per cent; and (b)on the balance of such long-term capital gains, if any, at the rate of forty per cent; and (ii) the amount of income-tax with which it would have been chargeable had its total income been reduced by the amount of long-term capital gains referred to in clause (i)." 2 Inserted by the Finance Act, 1976, w.e.f. 1-6-1976. 4 Substituted by the Finance Act, 1994, w.e.f. 1-4-1995. Prior to the substitution, subsection (1) read as under: "(1) Subject to the provisions of 1[sub-sections (1A) and (2)], where the total income of an assessee, being a foreign company, includes any income by way of- (a) dividends; or 2 [(aa) interest received from Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency; or] 3[(ab) income received in respect of units, purchased in foreign currency, of a Mutual Fund specified under clause (23D) of section 10; or] 4[(b) royalty or fees for technical services received from Government or an Indian concern in pursuance of an agreement made by the foreign company with Government or the Indian concern after the 31st day of March, 1976, and where such agreement is with an Indian concern, 5[the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy],] the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated on the amount of income by way of dividends, if any, included in the total income, at the rate of twenty-five per cent; 6[(ia)the amount of income-tax calculated on the income by way of interest referred to in clause (aa), if any, included in the total income, at the rate of twenty-five per cent;] 7[(ib)the amount of income-tax calculated on the income in respect of units referred to in clause (ab), if any, included in the total income, at -> -> ----------------------------------------------------------------------- 1.464 (a) a non-resident (not being a company) or of a foreign company, includes any income by way of-- (i) dividends; or ----------------------------------------------------------------------- the rate of twenty-five per cent;] 8[(ii)the amount of income-tax calculated on the income by way of royalty, if any, included in the total income, at the rate of thirty per cent;] (iii)the amount of income-tax calculated on the income by way of fees for technical services, if any, included in the total income, at the rate of 9[thirty per cent]; and (iv)the amount of income-tax with which it would have been chargeable had its total income been reduced by the amount of income referred to in clause (a), 10[clause (aa)] and clause (b). Explanation.-For the purposes of this section,- (a) "fees for technical services" shall "have the same meaning as in 11[Explanation 2] to clause (vii) of sub- section (1) of section 9; 12[13[(b)] "foreign currency" shall have the same meaning as in the Explanation below item (g) of sub-clause (iv) of clause (15) of section 10;] (c) "royalty" shall have the same meaning as in 14 [Explanation 2] to clause (vi) of sub-section (1) of section 9." 1 Substituted for "sub-section (2)" by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978. 2 Inserted by the Finance Act, 1983, w.e.f. 1-6-1983. 3 Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 4 Substituted by the Finance Act, 1983, w.e.f. 1-6-1983. Prior to the substitution, clause (b) read as under. "(b) royalty or fees for-technical services received from an Indian concern in pursuance of an agreement made by the foreign company with the Indian concern after the 31st day of March, 1976, and approved by the Central Government;" 5 Substituted for "such agreement is approved by the Central Government" by tile Finance Act, 1992, w.e.f. 1-6-1992. 6 Inserted by the Finance Act, 1983, w.e.f. 1-6-1983. 7 Inserted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 8 Substituted by the Finance Act, 1986, w.e.f. 1-4-1987. Prior to the substitution, clause (ii) read as under: "(ii) the amount of income-tax calculated on the income by way of royalty, if any, included in the total income- (1)on so much of the amount of such income as consists of lump sum consideration for the transfer outside India of, or the imparting of information outside India in respect of, any data, documentation, drawing, or specification relating to any patent, invention, model, design, secret formula, or process or trade mark or similar property, at the rate of twenty per cent; (2) on the balance of such income, if any, at the rate of forty per cent;" 9 Substituted for "forty per cent", ibid. 10 Inserted by the Finance Act, 1983, w.e.f. 1-6-1983. 11 Substituted for "the Explanation" by the Finance (No. 2) Act, 1977, w.e.f. 14-1977. 12 Inserted as clause (bb) by the Finance Act, 1983, w.e.f. 1-6- 1983. 13 Relettered for "(bb)", ibid. Clause (b), as originally enacted, and omitted by the Direct Tax Laws (Amendment) Act, 1989, read as under: "(b) "foreign company" shall have the same meaning as in section 80B;" 14 Substituted for "the Explanation" by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1977." ------------------------------------------------------------------------ 1.465 (ii) interest received from Government or an Indian concern on monies borrowed or debt incurred by Government or the Indian concern in foreign currency; or (iii) income received in respect of units, purchased in foreign currency, of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India, the income-tax payable shall be aggregate of- (A) the amount of income-tax calculated on the amount of income by way of dividends, if any, included in the total income, at the rate of twenty per cent; (B) the amount of income-tax calculated on the amount by. way of interest referred to in clause (ii), if any, included in the total income, at the rate of twenty per cent; (C) the amount of income-tax calculated on the income in respect of units referred to in clause (iii), if any, included in the total income, at the rate of twenty per cent ; and (D) the amount of income-tax with which he or it would have been chargeable had his or its total income been reduced by the amount of income referred to in clause (i), clause (ii) and clause (iii); (b) a foreign company, includes any income by way of royalty or fees for technical services received from Government or an Indian concern in pursuance of an agreement made by the foreign company with Government or the Indian concern after the 31st day of March, 1976, and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy, then, subject to the provisions of sub-sections (1A) and (2), the income-tax payable shall be the aggregate of, (A) the amount of income-tax calculated on the income by way of royalty, if any, included in the total income, at the rate of thirty per cent; (B) the amount of income-tax calculated on the income by way of fees for technical services, if any, included in the total income at the rate of thirty per cent; and (C) the amount of income-tax with which it would have been chargeable had its total income been reduced by the amount of income by way of royalty and fees for technical services. Explanation.-For the purposes of this section,- (a) "fees for technical services" shall have the same meaning as in the Explanation 2 to clause (vii) of sub- section (1) of section 9; (b) "foreign currency" shall have the same meaning as in the Explanation below item (g) of sub-clause (iv) of clause (15) of section 10; 1.466 (c) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9; (d) "Unit Trust of India" means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963).] 1[(1A) Where the royalty refer-red to in clause (b) of sub- section (1) is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book to an Indian concern 2[or in respect of any computer software to a person resident in India], the provisions of sub-section (1) shall apply in relation to such royalty as if the words 3[4[the agreement is approved by the Central Government or where it] relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy] occurring in the said clause had been omitted: Provided that such book is on a subject, the books on which are permitted, according to the Import Trade Control Policy of the Government of India for the period commencing from the 1st day of April, 1977, and ending with the 31st day of March, 1978, to be imported into India under an Open General Licence: 5[Provided further that such computer software is permitted according to the Import Trade Control Policy of the Government of India for the time being in force to be imported into India under an Open General Licence.] Explanation 6[1].-In this sub-section, "Open General Licence" means an Open General Licence issued by the Central Government in pursuance of the Imports (Control) Order, 1955.] 7[Explanation 2.-In this sub-section, the expression, "computer software" shall have the meaning assigned to it in clause (b) of the Explanation to section 80HHE.] (2)Nothing contained in sub-section (1) shall apply in relation to any income by way of royalty received by a foreign company from an Indian concern in pursuance of an agreement made by it with the Indian concern after the 31st day of March, 1976, if such agreement is deemed, for the purposes of the 8[first] proviso to clause (vi) of sub-section (1) of section 9, to have been made before the 1st day of April, 1976; and the provisions of the annual Finance Act for calculating, charging, deducting or computing income-tax shall apply in relation to such income as if such income had been received in pursuance of an agreement made before the 1st day of April, 1976.] ----------------------------------------------------------------------- 1 Inserted by the Finance (No. 2) Act, 1977, w.e.f. 1-4-1978. 2 Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991. 3 Substituted for "and approved by the Central Government" by the Finance Act, 1992, w.e.f. 1-6-1992. 4 Substituted for "approved by the Central Government or where the agreement" by the Finance Act, 1994, w.e.f. 1-4-1995. 5 Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1991. 6 Renumbered, ibid. 7 Inserted, ibid. 8 Inserted by the Finance (No 2) Act, 1991, w.e.f. 1-4-1991. ------------------------------------------------------------------------ 1.467 1[(3) No deduction in respect of any expenditure or allowance shall be allowed to the assessee under sections 28 to 44C and section 57 in computing his or its income referred to in sub-section (1). (4) Where in the case of an assessee referred to in sub-section (1),- (a) the gross total income consists only of the income referred to in clause (a) of that sub-section, no deduction shall be allowed to him or it under Chapter VIA; (b) the gross total income includes any income referred to in clause (a)of that sub-section, the gross total income shall be reduced by the amount of such income and the deduction under Chapter VIA shall be allowed as if the gross total income as so reduced were the gross total income of the assessee. (5) It shall not be necessary for an assessee referred to in sub-section (1) to furnish under subsection (1) of section 139 a return of his or its income if- (a) his or its total income in respect of which he or it is assessable under this Act during the previous year consisted only of income referred to in clause (a) of sub-section (1); and (b) the tax deductible at source under the provisions of Chapter XVII-B has been deducted from such income.] 2[115AB. Tax on income from units purchased in foreign currency or capital gains arising from their transfer (1) Where the total income of an assessee, being an overseas financial organisation (hereinafter referred to as offshore fund) includes- (a) income received in respect of units purchased in foreign currency; or (b) income by way of long-term capital gains arising from the transfer of units purchased in foreign currency, the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated on the income in respect of units referred to in clause (a), if any, included in the total income, at the rate of ten per cent; (ii) the amount of income-tax calculated on the income by way of long term capital gains referred to in clause (b), if any, included in the total income, at the rate of ten per cent; and (iii) the amount of income-tax with which the offshore fund would have been chargeable had its total income been reduced by the amount of income referred to in clause (a) and clause (b). ----------------------------------------------------------------------- 1 Inserted by the Finance Act, 1994, w.e.f. 1-4-1995. 2 Inserted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992. ------------------------------------------------------------------------ 1.468 (2) Where the gross total income of the offshore fund,- (a) consists only of income from units or income by way of long-term capital gains arising from the transfer of units, or both, no deduction shall be allowed to the assessee under sections 28 to 44C 1[* * *] or clause (i) or clause (iii) of section 57 or under Chapter VIA 2 [and nothing contained in the provisions of the second proviso to section 48 shall apply to income referred to in clause (b) of sub-section (1)]; (b) includes any income referred to in clause (a), the gross total income shall be reduced by the amount of such income and the deduction under Chapter VIA shall be allowed as if the gross total income as so reduced were the gross total income of the assessee. Explanation.-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, which has entered into an arrangement for investment in India with any public sector bank or public financial institution or a mutual fund specified under clause (23D) of section 10 and such arrangement is approved by the Central Government for this purpose; (b) "unit" means unit of a mutual fund specified under clause (23D) of section 10 or of the Unit Trust of India; (c) "foreign currency" shall have the meaning as in the Foreign Exchange Regulation Act, 1973 3 (46 of 1973); (d) "Public sector bank" shall have the meaning assigned to it in clause (23D) of section 10; (e) "Public financial institution" shall have the meaning assigned to it in section 4A of the Companies Act, 1956 4 ( 1 of 1956); (f) "Unit Trust of India" means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963).] 5[115AC. Tax on income from bonds or shares purchased in foreign currency or capiual gains arising from their transfer (1) Where the total income of an assessee, being a non-resident, includes- (a) income by way of interest or dividends, on bonds or shares of an Indian company, issued in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf,6 and purchased by him in foreign currency; or ----------------------------------------------------------------------- 1 The words "or sub-section (2) of section 48" omitted by the Finance Act, 1992, w.e.f. 1-4-1993. 2 Inserted by the Finance Act, 1992, w.e.f. 1-4-1993. 4 Ibid. 5 Inserted by the Finance Act, 1992, w.e.f. 1-4-1993. 6 The Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 has been specified in respect of assessment year 1993-94 (previous year 1992-93) and subsequent assessment years. ----------------------------------------------------------------------- 1.469 (b) income by way of long-term capital gains arising from the transfer of bonds or, as the case may be, shares referred to in clause (a), the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated on the income by way of interest or dividends, as the case may be, in respect of bonds or shares referred to in clause (a), if any, included in the total income, at the rate of ten per cent; (ii) the amount of income-tax calculated on the income by way of long term capital gains referred to in clause (b), if any, at the rate of ten per cent; and (iii) the amount of income-tax with which the non- resident would have been chargeable had his total income been reduced by the amount of income referred to in clause (a) and clause (b). (2) Where the gross total income of the non-resident- (a) consists only of income by way of interest or dividends in respect of bonds or, as the case may be, shares referred to in clause (a) of sub-section (1), no deduction shall be allowed to him under sections 28 to 44C or clause (i) or clause (iii) of section 57 or under Chapter VIA; (b) includes any income referred to in clause (a) or clause (b) of subsection (1) the gross total income shall be reduced by the amount of such income and the deduction under Chapter VIA shall be allowed as if the gross total income as so reduced, were the gross total income of the assessee. (3) Nothing contained in the first and second provisos to section 48 shall apply for the computation of long-term capital gains arising out of the transfer of long-term capital asset, being bonds or shares refer-red to in clause (b) of sub-section (1). (4). It shall not be necessary for a non-resident to furnish under subsection (1) of section 139 a return of his income if- (a) his total income in respect of which he is assessable under this Act during the previous year consisted only of income referred to in clause (a) of sub-section (1); and (b) the tax deductible at source under the provisions of Chapter XVIIB has been deducted from such income.] 1[115AD. Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer (1) Where the total income of a Foreign Institutional Investor includes- (a) income received in respect of securities (other than units referred to in section 115AB) listed in a recognised stock exchange in India in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and any rules made thereunder; or (b) income by way of short-term or long-term capital gains arising from the transfer of such securities, ------------------------------------------------------------------------ 1 Inserted by the Finance Act, 1993, w.e.f. 1-4-1993. ------------------------------------------------------------------------ 1.470 the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated on the income in respect of securities referred to in clause (a), if any, included in the total income, at the rate of twenty per cent; (ii) the amount of income-tax calculated on the income by way of short term capital gains referred to in clause (b), if any, included in the total income, at the rate of thirty per cent; (iii) the amount of income-tax calculated on the income by way of long term capital gains referred to in clause (b), if any, included in the total income, at the rate of ten per cent; and (iv) the amount of income-tax with which the Foreign Institutional Investor would have been chargeable had its total income been reduced by the amount of income referred to in clause (a) and clause (b). (2) Where the gross total income of the Foreign Institutional Investor- (a) consists only of income in respect of securities referred to in clause (a) of sub-section (1), no deduction shall be allowed to it under sections 28 to 44C or clause (i) or clause (iii) of section 57 or under Chapter VIA; (b) includes any income referred to in clause (a) or clause (b) of subsection (1), the gross total income shall be reduced by the amount of such income and the deduction under Chapter VIA shall be allowed as if the gross total income as so reduced, were the gross total income of the Foreign Institutional Investor. (3) Nothing contained in the first and second provisos to section 48 shall apply for the computation of capital gains arising out of the transfer of securities referred to in clause (b) of sub-section (1). Explanation.-For the purposes of this section,- (a) the expression "Foreign Institutional Investor" means such investor as the Central Government may, by notification" in the Official Gazette, specify in this behalf; (b) the expression "securities" shall have the meaning assigned to it-in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 2 (42 of 1956).] 3[115B. Tax on profits and gains of life insurance business 4[(1)] Where the total income of an assessee includes any profits and gains from life insurance business, the income-tax payable shall be the aggregate of- (i) the amount of income-tax calculated on the amount of profits and ---------------------------------------------------------------------- 3 Inserted by the Finance Act, 1976, w.e.f. 1-6-1976. 4 Inserted by the Finance Act, 1988, w.e.f 1-4-1989. ---------------------------------------------------------------------- 1.471 gains of the life insurance business included in the total income, at the rate of twelve and one-half per cent; and (ii) the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of profits and gains of the life insurance business.] 1[(2) Notwithstanding anything contained in sub-section (1) or in any other law for the time being in force or any instrument having the force of law, the assessee shall, in addition to the payment of income-tax computed under sub-section (1), deposit, during 2[the previous years relevant to the assessment years commencing on the 1st day of April, 1989 and the 1st day of April, 1990], an amount equal to thirty-three and one-third per cent of the amount of income-tax computed under clause (i) of sub-section (1), in such social security fund (hereafter in this subsection referred to as the security fund), as the Central Government may, by notification3 in the Official Gazette, specify in this behalf: Provided that where the assessee makes during the said previous 4[years] any deposit of an amount of not less than two and one-half per cent of the profits and gains of the life insurance business in the security fund, the amount of income-tax payable by the assessee under the said clause (i) shall be reduced by an amount equal to two and one-half per cent of such profits and gains and, accordingly, the deposit of thirty-three and one-third per cent required to be made under this sub-section shall be calculated on the income-tax as so reduced.] 5[115BB. Tax on winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever Where the total income of an assessee includes any income by way of winnings from any lottery or crossword puzzle or race including horse race (not being income from the activity of owning and maintaining race horses) or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, the income- tax payable shall be the aggregate of- (i) the amount of income-tax calculated on income by way of winnings from such lottery or crossword puzzle or race including horse race or card game and other game of any sort or from gambling or betting of any form or nature whatsoever, at the rate of forty per cent; and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i). ----------------------------------------------------------------------- 1 Inserted by the Finance Act, 1988, w.e.f. 1-4-1989. 2 Substituted for "the previous year relevant to the assessment year commencing on the 1st day of April, 1989" by the Finance Act, 1989, w.e.f. 1-4-1990. 4 Substituted for "year" by the Finance Act, 1989, w.e.f. 1-4-1990. 5 Inserted by the Finance Act, 1986, w.e.f. 1-4-1987. ----------------------------------------------------------------------- 1.472 Explanation.-For the purposes of this section, "horse race" shall have the same meaning as in section 74A.] 1[115BBA. Tax on non-resident sportsmen or sports associations (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 wherefrom are taxable under section 115BB) or sport; or (ii) advertisement; or (iii)contribution of articles relating to any game or sport in India in newspapers, magazines or journals; or (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 wherefrom are taxable under section 115BB) or sport played in India, the income-tax payable by the assessee shall be the aggregate of- (i) the amount of income-tax calculated on income referred to in clause (a) or clause (b) at the rate of ten per cent; and (ii) the amount of income-tax with which the assessee would have been chargeable had the total income of the assessee been reduced by the amount of income referred to in clause (a) or clause (b): Provided that 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 clause (a) or clause (b). (2) It shall not be necessary for the assessee to furnish under subsection (1) of section 139 a return of his income if- (a) his total income in respect of which he is assessable under this Act during the previous year consisted only of income referred to in clause (a) or clause (b) of sub-section (1); and (b) the tax deductible at source under the provisions of Chapter XVIIB has been deducted from such income.] ----------------------------------------------------------------------- 1 Inserted by the Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1990. ----------------------------------------------------------------------- 1.473
Read All Comments
