Professional Documents
Culture Documents
03
SAI
CIRCULARS
(A MONTHLY MAGAZINE ON UPDATION OF INDIAN TAX PROVISIONS)
JUNE
2008
NON - RESIDENTS (IN INDIA)
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SAI CIRCULARS
(A Monthly Magazine on Updation
Of Indian Tax Provisions)
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(D) Miscellaneous Acts ([i] Service Tax [ii] ESI And [iii] Delhi Value Added Tax (DVAT))
(IV) *As per decided case of Mr. ROHITASAVA 05 (I) Provisions of expenses, under the head
CHAND Vs. CIT (New Delhi) decided on ‘gratuity’, on the ‘actuarial valuation basis’
20.03.2008, decided by the High court, at are treated as ‘acertained liabilities’, for the
New Delhi. purpose of computating of ‘adjusted profit’,
for MAT (Minimum alternate tax)
02 (I) A person is ‘ordinary resident’ (in India), *Section 115JB
where (a) Residing ‘minimum 9 (nine) years’,
‘out of’ 10 (ten) years ‘and’ (also) (b) Residing (II) *As per decided case of CIT-IV (New Delhi)
‘minimum 730 (Seven hundreds thirty) days’, Vs. M/s HEWLETT PACKARD INDIA (P) LTD,
‘out of’ 7 (seven) preceding years. decided on 31.03.2008, decided by the High
court at New Delhi.
(II) In view of the abovementioned, the person
is ‘non-ordinary resident’ (in India), where 06 (I) AO (Assessing Officer) is (mandatory) required,
(a) Residing ‘maximum 9 (nine) years’, ‘out ‘to give’ a reasonable ‘opportunity of
of’ 10 (ten) years ‘and’ (also) (b) Residing being heard’, before ordering, for the
‘maximum 730 (seven hundreds thirty) days’, special audit *Section 142 (2A)
‘out of’ 7 (seven) preceeding years.
*Section 6 (6) (II) ‘Audit report’ (in abovementioned case)
is required, to be furnished, with in the
(III) *As per decided case of MR. PRADIP J. specified time (Including extended time).
MEHTA Vs. CIT (Ahemdabad) decided on However ‘maximum time’, for the furnishing
11.04.2008, decided by the Supreme court report is 180 (one hundred eighty) days
of India at New Delhi. (by the CA Firm). *Section 142 (2C)
03 (I) Expenditures (payments) made, by the (III) *As per decided case of M/s SAHARA
assessee, on account of the damages, for INDIA (FIRM) LUCKNOW Vs. CIT (Central-I)
‘breach of contract’ are allowable expendi- decided on 11.04.2008, decided by the
tures *Section 37 (1) Supreme court of India, at New Delhi.
07 (I) ‘No penalty’ is leviable, for the
(II) ‘Infraction of law’ is different, from the
breach of the ‘business contract’. Henceforth concealment of the incomes, where facts
breach of the ‘business obligations’ are and circumstances are strongly indicated,
treated as ‘normal incident to the business’. that an ‘inducement’ and ‘allurement’ had
Therefore expenditures (payments) for ‘breach been made on the assessee, during the
of contract’ are treated ‘expended wholly search and seizure
and exclusively, for the purpose of business. *Section 271 (1) (c)S
4 SAI CIRCULARS JUNE-2008
(II) Facts of the case :- due thereon, ‘based on the (abovementioned)
(a) Assessee was ‘compelled to disclose’ the verbal assurance’.
certain incomes, with the ‘verbal assurance’
that ‘no penalty’ *Section 271 (1) (c) (III) *As per decided case of M/s
would be levied. SUDARSHAN SILKS & SAREES Vs. CIT
(Karnataka) decided on 11.04.2008, decided
(b) Assessee has offered the incomes, by
by the Supreme court of India, at New Delhi.
filling of the revised return and ‘paid tax’
02 DTAA (Double taxation avoidance agreement) with (VII) DTAA, is (also) incorporating provisions,
govt. of the UNION of MYANMAR (commonly for the (a) Exchange of the informations
knowns as VARMA).
(b) ‘Anti-Abuse provisions’, to ensure, that
*Special features of the (abovementioned) the benefits of DTAA are being availed, by
DTAA :- the genuine residents of the both states.
(I) Taxes covered :-
‘In India’ :- (a) Income tax (b) Surcharge (VIII) *As per Press release, dated
(both) 03.04.2008.
‘In Myanmar’:- (a) Income tax (b) Profit
tax (both). 02 Guidelines, for the attribution (computation) of
amount of expenditure, against the
(II) Income tax is leviable, on the ‘business incomes, ‘not included’ in the ‘taxable
profits’, in the ‘state of its source’, where incomes’ (commonly known as ‘exempted incomes’)
the activities of the enterprise is *Rule 8C (2)
constituting a PE (Permanent establishment) in
the ‘state of its source’.
(I) 100 (one hundred) % ‘attribution’ of the
(III) PE includes :- ‘direct expenditures’, on the ‘non-taxable
(a) A branch (b) A factory (c) A place of incomes’.
management (d) A sales outlet ‘etc’.
(II) ‘Proportionate’, ‘attribution’ of the
(IV) Profits of (a) Construction (b) ‘indirect-expenditures’ on the ‘non-taxable
Assembly or (c) Installation project are incomes’ i.e. expenditures, under the head
liable to Income tax, in the ‘state of its ‘interest’.
source’, where the ‘project continues’, for
the ‘minimum period of 270’ (two hundreds (III) 0.5 (half) % (‘average value of the investments’)
and seventy) days. are to ‘be attributed’ (on lum-sum basis),
towards the expenditures, under the head
(V) Profits of the operations of (a) Ship ‘non interest’, against the ‘non-taxable
(b) Aircraft, are liable to Income tax, in the incomes’.
‘state of its residence’ ‘and’ (also) in the
‘state of its source’ (‘both’). (IV) *As per Notification no. 45/2008, dated
24.03.2008.
(B) Service tax (Finance) Act, 1994
01 Guidelines, for the records, which are to be (ab) Description of the exported goods
maintained/produced, by the exporters, (ac) Number and date of the invoice (issued by
for the claiming of refunds. the exporter).
(I) Services provided, by the ‘customs (ad) Details of the ‘all charges’ (collected by the
house agent’, (to the exporters) agent).
*Section 65 (105)(h)
(a) Invoices, (issued by the agent) specifying:- (b) Details of the ‘other taxable’ services
(aa) Number and date of the shipping bill (provided by the agent).
6 SAI CIRCULARS JUNE-2008
(II) Services provided, by the banking itself.
company/financial institution/NBFC/other (c) Documents, evidencing of actual export of
body corporate, for the banking and other the goods.
financial services *Section 65 (105) zm (d) ‘No refund’ of the services tax, ‘exceeding’
*Abovementioned records are to be ‘ither’ (da) ‘Actual Service tax paid’ ‘or’
maintained /produced, for the evidences, (db) ‘2 (two) % of the FOB value’ of the
‘to link’ the uses of the services, against exported goods, ‘whichever is lower’.
the exported goods (only).
(e) ‘Commission’ paid/payable should ‘not
(III) Services provided, by the commission be, for’ (ea) Export of the canalized items
agent, ‘located outside India’, for the sale (eb) Project exports (ec) Export financed,
of exported goods under lines of the credit extended, by govt. of
*Section 65 (105) (zzb) India/Exim bank (ed) Exports made, by the
(a) Agreement/contract/any other Indian partners, for the purpose of their
document, for the providing services, by equity participation, in the foreign joint
the commission agent (‘located outside India’). venture/wholly owned (100%) subsidiary.
(b) ‘Declaration’ of the amount of (IV) *As per Notification no. 17/2008-Service
commission paid/payable, to the tax, dated 01.04.2008.
(abovementioned) agent, in the ‘shipping bill’
E – Mail: theaccountants.b@gmail.com
(B) TAX DEDUCTED AT SOURCE (TDS)
[FOR THE FINANCIAL YEAR ENDING ON 31.3.2009- ASSESSMENT YEAR 2009-2010]
S. Under the head (Section) Zero TDS Individuals (1) Domestic (1)
No on Payments (includes HUFs, Companies and
Upto RS. BOIs and AOPs) Firms
Regular Rates
1 Salary *Section –192 1,50,000 [applicable to the -N/A-
individuals] (2)
Interest [On Securities) (Resident [only]] 2,500 10.30%
2 20.60%
*Section – 193
3 Deemed’ Dividend [Resident ‘only’] 2,500 20.60%
20.60%
*Section – 194 read with 2(22)
Interest [‘other than’ on Securities] 5,000(7) 10.30%
4 20.60%
*Section – 194(A)
Winning from Lottery and Cross Puzzle 5,000 30.90%
5 30.90%
*Section – 194(B)
6 Winning from Horse Race *Section - 194(BB) 2,500 30.90% 30.90%
Payment to Contractor 20,000 (6) 2.06%
7 2.06%
*Section -194 C
7A Payment to Sub-Contractor and for 20,000 (6) 1.03% 1.03%
Advertisement Contract
8 Insurance Commission 5,000 10.30% 20.60%
*Section - 194 D
9 Non-Resident Sports Man or Sports NIL 10.30% - N/A -
Association *Section-194 E
10 NSS *Section - 194 EE 2,500 20.60% -N/A-
11 Equity Linked Saving Scheme NIL 20.60% - N/A -
[(ELSS)] *Section - 194 F
12 Commission and Brokerage (On Sale of 1,000 10.30% 10.30%
Lottery Tickets [only]) *Section-194 G
13 Commissions and Brokerage [‘Other than’ on 2,500 10.30% 10.30%
sale of Lottery Tickets) *Section-194H
14 Rent *Section - 194-I 1,20,000 15.45% - N/A-
(i) Rent to Individual and HUF
(ii) Rent to Other (Non-Individual and non-HUF) 1,20,000 20.60% 20.60%
(iii) Rent for Hiring of Plant and Machin ery
[to Individual/Huf and company/ firm]. 1,20,000 10.30% 10.30%
15 Fees for Professional or Technical Services 20,000 10.30% 10.30%
*Section–194J
16 Compensation on Compulsory Acquisition of 1, 00,000 10.30% 10.30%
Immovable Property *Section – 194 LA
17 Payments to Non Resident and Non- NIL 30.90% 51.50%
Domestic Company [There are different (Maximum) (Maximum)
‘Specific Rates’ applicable, which are also
lower than maximum rates] *Section – 195
18 Units Held by Offshore Fund *Section – 196B NIL 10.30% 10.30%
19 Incomes from Foreign Currency Bonds NIL 10.30% 10.30%
*Section – 196C
20 Incomes of Foreign Institutional Investors NIL 20.60% 20.60%
(FIIs) from Securities *Section – 196D [‘not’ [10.30% For short [10.30% For short
being dividend, short-term/Long-term capital gains]. term capital gain term capital gain
[section 111 (A)]
(II) A person, who is (also) ‘not a ordinarily (b) ‘Maximum stay’ (in India), should be
resident’ (in India) *Section 6 (6) three hundreds sixty five (365) days, ‘in the
preceeding’ four (4) years, ‘alongwith’
(III) An individual *Section 6 (1) ‘maximum stay’ (in India) should be of sixty
(a) ‘Maximum stay’ should be one
(in India), (60) days, in the respective previous year.
03 Incomes deemed to accure/arise (in India) (XI) ‘No royalty payment’, is liable to
*Section 9 Income tax (in India) where (a) Royalty is
(I) ‘All’ (100%) incomes are deemed to consisting of ‘lump-sum payment’
accure/arise ‘in India’, where ‘earned from’ (consideration) for imparting of information,
(a) ‘Directly/indirectly’ ‘or’ ‘through/from’ any data, documenta- tion, drawing, secret
‘business connection in India’ formula, process, trade mark etc. ‘outside
(b) ‘Any asset’ ‘or’ source of income ‘in India’. India’ ‘and’ (also) (b) Royalty (abovementioned)
(c) ‘Capital asset’, as situated ‘in India’ should be in pursuance of an agreement
made ‘before 01.04.1976’ and (c)
(II) ‘Proportionate’ (not 100%) incomes are Agreement (abovementioned) has (also)
deemed to accure/arise (in India), where ‘partial been approved by the ‘Central govt.’ (d) All
operations’ are being carried out ‘in India’. (abovementioned) three (3) conditions are to be
satisfied ‘together’.
(III) ‘No deemed to accure’/arise (in India) where
operations of the ‘Non-Residents’ are (XII) ‘Royalty includes’ :- ‘Lum-sum
‘restricted to purchases’ (only) for the purpose payment’ (consideration) ‘royalty excludes’ :-
of the ‘exports from India’. Payment (consideration) which are (also) as
liable to Income tax (in India) under the head
(IV) ‘No deemed to accure’/arise (in India) where ‘capital gains’ *Section 45 to 55A ‘for transfer
operations of the ‘Non-Residents’ are of’ the information, data, documentation,
‘restricted to collection of news and views’ drawing, secret formula, process,
(only) for the purpose of the ‘transmissions’ to trademark etc.
‘outside India’.
(XIII) Incomes under the head ‘fees for the
(V) ‘No deemed to accure’/arise (in India) where technical services’, ‘paid by’ the (a) ‘Govt’
operations of the ‘Non-Residents’ are ‘or’ (b) ‘Resident’ (in India) [‘except for’ the
‘restricted to shooting of any cinematograph purpose of business/profession, carried on ‘outside
film’ (only). for the purpose of ‘telecasting’ to India’ ‘or’ for the purpose of earning any income
‘outside India’. ‘outside India’] ‘or’ (c) ‘Non-resident’ (in India),
for the purpose of ‘business/profession’
(VI) Incomes, under the head ‘salaries’, earned ‘carried in India’ are (also) liable to Income
(in India) for the service rendered (in India) and
tax (in India).
(also) for the rest/leave period [included ‘preceded’
and suceeded period (both)] are (also) liable to
(XIV) ‘No fees payment’, for the technical
Income tax (in India). services’, is liable to Income tax (in India)
(VII) Incomes, under the head ‘salaries’, ‘paid where
by govt’. of India’ ‘to’ the citizen (of India) for (a) Fees for the technical services are in
the services rendered ‘outside India’ are (also) pursuance of an agreement made ‘before
liable to Income tax (in India). 01.04.1976’ ‘and’ (also) (b) Agreement
(abovementioned) has been approved by the
(VIII) Incomes, under the head ‘dividend’, ‘paid ‘Central govt’. (c) All (abovementioned) two (2)
by Indian (domestic) company’, to ‘outside India’ conditions are to be satisfied ‘together’.
are (also) liable to Income tax (in India).
(XV) Certain incomes shall ‘be included in’
(IX) Incomes, under the head ‘interest’, ‘paid the total incomes of the non-resident (in
by’ the (a) ‘Govt’. ‘or’ (b) ‘Resident’ (of India), India) ‘irrespective of fact’ the non-resident
[‘except for’ the purpose of business/profession, carried
‘outside India’ ‘or’ for the purpose of earning any (in India) ‘has a residence’ ‘or’ ‘place of
income ‘outside India’] ‘or’ (c) ‘Non-resident’ (in business’ or ‘business connection’ (in India)
India), for the purpose of ‘business/profession’ ‘or not’, where incomes are deemed to
‘carried in India’, are (also) liable to Income tax accure/arise ‘in India’, under the followings
(in India). heads:-
(X) Incomes, under the head ‘royalty’, ‘paid by’ (a) ‘Interest’ *Section 9 (1) (v)
the (a) ‘Govt’. ‘or’ (b) ‘Resident’ (in India) (b) ‘Royalty’ *Section 9 (1) (vi)
[‘except for’ the purpose of business / profession
carried ‘outside India’ ‘or’ for the purpose of earning (c) ‘Fees for the technical services’
any income ‘outside India’] ‘or’ *Section 9 (1) (vii)
17 SAI CIRCULARS JUNE-2008
(C) Exempted Incomes *Section 10
01 ‘Exempted incomes’, under the head interest, (II) ‘No exemption’, under the head (a)
on ‘certain’ saving certificates *Section 10 (4B) Salary (b) Royalty (c) Fees for the technical
(I) Saving certificates, should have been issued services.
‘before 01.06.2002’, by the Central govt (only). 04 ‘Exempted incomes’ out of the funds
available ‘accordance with the agreement’
(II) Saving certificates, should have been made between ‘international organisation’
subscribed in ‘convertible foreign exchange’,
and ‘govt of a foreign state’ *Section 10
‘and’ (also) ‘remitted directly from the ‘outside
(8A) & 8B
India’. Accordance with FERA, 1973.
(I) Received ‘in India’, as remuneration/fee
(III) ‘Abovementioned’ exemption is available to in connection with the technical
the NRIs (only). assistance programme/project of the
02 ‘Exempted receipts’, under the head travel ‘international organisation’.
concession/assistance, received from the (II) Technical ‘assistance programme’/
employer (Central govt.) *Section 10 (5) project should have been approved by the
(I) For, proceeding ‘on leave’ to any place Central govt.
‘in India’.
05 ‘Exempted incomes’, of the ‘family
(II) For, proceeding to any place , ‘after members’ of Non-Resident, ‘accompanying
retirement/termination, ‘in India’. in India’, for the projects of ‘approved
(III) ‘No exemption’, on the amount ‘exceeding International organisation’
the actual expenditure’. *Section 10 (9)
03 ‘Exempted incomes’, earned/deemed earned * ‘No Income tax’ is leviable ‘in India’, on
‘accordance with the agreement’ made the incomes, accures/arises ‘outside
between ‘govt. of India’ and ‘govt. of a foreign India’, belonging to the family members
state’ *Section 10 (6B) (only) ‘and’ (also) Income tax/security tax
(I) Agreement should have been made ‘before has (already) been paid to the govt. (of the
01.06.2002’. foreign state).
(H) Special Provisions, for the ‘Tax Relief’, Where is ‘No DTAA’
*Section 9
01 (I) ‘Partial relief’ (in India) to the certain foreign India’, (during the respective previous year).
incomes, by way of allowing ‘tax rebate’. (c) Taxes should have been ‘paid outside
However (abovementioned) ‘tax rebate’ shall India’, (during the respective previous year).
be ‘lower’ between ‘average tax rates’ ‘outside (d) All (abovementioned) 3 (three) conditions are
India’ and average tax rates ‘in India’. to be satisfied ‘together’ [(cumulatively).
(II) Mandatory conditions, for availing of the (III) ‘No set offs of the losses’ of one foreign
(abovementioned) ‘tax rebate’ :- country, against the incomes of another
(a) Assessee should be ‘resident of India’ (during foreign country are permitted (in India)
the respective previous year). (* As per decided case of CIT Vs. BOMBAY BURMAH
TRADING Co. LTD, decided by the highcourt at
(b) Incomes should have been accured ‘outside
Bombay].
20 SAI CIRCULARS JUNE-2008
(I) Avoidance of the Income tax, by a transaction, resulting in
transfer of Income to the Non-Resident *Section 93
01 (I) Income tax (in India) is leviable, in the hands of the Income tax Act, 1961’.
of transferror’, on the incomes arises out of (III) ‘Transferror is not liable’, for the
assets, transfered (alone or in conjuction with Income tax, where transferror is satisfying
associated operations) to the Non-Resident.
to the Assessing officer (AO) for (a) ‘No
(II) Income tax is (also) leviable, in the hands of avoidance of the Income tax’.
transferror’ in the (abovementioned) case, where (b) Transfer was the ‘bonafide commercial
assets were transfered ‘before the transaction’.
commencement
(J) ‘General’ and ‘special’ rates of the tax *Section 115A
* General Rates *
01 ‘General’ rates of tax (for the A.Y. 2009-2010):- rupees ten (10) lacs for the resident and
(I) Income tax * non-resident (both).
(a) @10 (ten) % , on the incomes ‘between’ (III) *Education cess*
rupees 1,50,001 to 3,00,000. @3 (three) % , ‘on the amount of Income
(b) @20 (twenty) % , on the incomes ‘between’ tax’ (including of surcharge).
rupees 3,00,001 to 5,00,000. (IV) *Capital gains*
(c) @30 (thirty) % , on the incomes ‘above’ (a) @15 (fifteen) % , (10% upto Ay. 2008-
rupees 500,001 09, i.e. year ending on 31.03.2008) on the
(II) *Surcharge* amount of ‘short term capital gains’
@10 (ten) % , ‘surcharge’, ‘on the amount, of *Section 111A
Income tax’, where total income is exceeding (b) @20 (twenty) % , on the amount of ‘long
term capital gains’ *Section 112
*Special Rates, for the ‘Certain Non-Business incomes’ *Section 115A
01 * @20 (twenty) % , on the incomes under investments in ‘bonds/GDRs’ (Global
the heads (a) Dividend (b) Royalty and purchased in the ‘foreign
depository receipts)
(c) Fees for the technical services currency’ *Section 115AC
* Section 115A *Incomes includes:- (a) Interest on bonds
(a) Dividend [‘except’ referred in *Section 115-O , (b) Dividend [‘except’ as reffered in] *Section
where DDT (Dividend distribution tax) has (already) been 115-O (c) ‘No deduction’ is permitted, for
paid].
any expenditure/allowance *Section 28 to 44C
(b) Interest income, received on the lended
and 57 (d) ‘No deduction’ is permitted,
money/debt in the ‘foreign currency’.
under Chapter VI-A *Section 80A to 80VV (e) ‘No
(c) Income on the investments, made in
(mandatory) filing’ of Income tax return
domestic (Indian) mutual funds/UTI, lended in
*Section 139 (1) where proper TDS has
the ‘foreign currency’. (d) ‘No deduction’ is
(already) been deducted, under Chapter
permitted, for any expenditure/allowance
*Section 28 to 44C and 57
XVII-B *Section 192 to 206 B
(e) ‘No deduction’ is permitted, under Chapter 04 @10 (ten) %/20 (twenty) %/30 (thirty) % , on
VI-A *Section 80A to 80VV the incomes, under the head:- ‘Income’ and
(f) ‘No (mandatory) filing’ of Income tax ‘capital gain’ on the investments in
return *Section 139 (1) where proper TDS has securities (i.e. shares etc) by the FIIs [Foreign
(already) been deducted, under Chapter XVII-B institutional investors] * Section 115AD
*Section 192 to 206B (I) @10 (ten) % , on the LTCG (Long term capital
gains).
02 @10 (ten) % , on the incomes, under the
(II) @20 (twenty) % , on the ‘incomes (i.e.
heads (a) ‘Income’, on the units (purchased in dividend, ‘except’ as reffered in section 115-O).
the ‘foreign currency’) (b) ‘Capital gain’ on the (III) @30 (thirty) % , on the STCG (Short term
units [purchased in the ‘foreign currency’] * Section capital gains).
115AB (a) ‘No deduction’ is permitted, for any (IV) ‘No deduction’ is permitted, for any
expenditure/allowance *Section 28 to 44C expenditure/allowance *Section 28 to 44C and 57
and 57 (1) (b) ‘No deduction’ is permitted, (V) ‘No deduction’ is permitted, under
under chapter VI-A *Section 80A to 80VV chapter-VI-A *Section 80A to 80VV
03 @10 (ten) % , on the income, under the head (VI) ‘No indexation’ benefit is permitted, for
‘Income’ and ‘capital gain’, on the the computing of ‘cost of acquisition’
*Section 48
21 SAI CIRCULARS JUNE-2008
*Special Rates, for the Sportsman or Sports Association
*Section 115 BBA
01 (I) @10 (ten) % , on the incomes under the (II) ‘No deduction’ is permitted, for any
heads :- expenditure/allowance in computing the
(a) Fees, for the participation in any ‘game (abovementioned) incomes.
and/or sport’.
[‘Except’ lotteries, cross word puzzles, races, card game (III) ‘No mandatory’ filing of the return of
and other of any sort of betting of any form or nature the incomes *Section 139 (1) where
whatsoever] *Section 115BB (a) ‘No other incomes’, ‘except
(b) Receipts (incomes), from the advertisements abovementioned’ and (also)
(c) Receipts (Incomes), from the articles on any (b) TDS has (already) been properly deducted
game/sport (in India) in any newspaper, * Chapter XVII-B
magazine, journal.
(K) Special provisions, for the Non-Resident Indians *Section 115C to 115-I
01 * Definitions *Section 115C 03 Tax on the investment incomes and long
(I) ‘Covnertible foreign exchanges’ :- term capital gains, for the Non-Resident
Which are ‘treated’, by the RBI, for the purpose Indians (NRIs) ‘only’ *Section 115E
of the foreign Exchange Regulation Act, 1973 (I) @20 (twenty) % , on the (a) Investment
and any other rule made, for the same. incomes and (also) (b) ‘Long term’ capital
(II) ‘Foreign exchange assets’ :- gains, on the ‘non-specified assets’.
Which are ‘acquired/purchased’, by any person (II) @10 (ten) %, on the ‘long term’ capital
(including non-resident), in the ‘convertible foreign gains, on the ‘specified assets’.
exchanges’.
04 Special provisions, for the ‘long-term’
(III) ‘Investment incomes’ :- capital gains, on the transfer of ‘foreign
Which are derived’ [Except reffered in Section 115-O] exchange assets’, for the Non-Resident
from a ‘foreign exchange’ assets’. Indians (NRIs) ‘only’ *Section 115F
(IV) ‘Long term capital gains’ :- (I) ‘No capital gain tax’ *Section 45
Which are liable to Income tax, under the head where whole (100%) net consideration is
‘capital gains’ and (also) which are ‘not short invested, with in 6 (six) months, in any
term capital gains’, relating to the ‘capital ‘specified asset’ ‘or’ in any ‘savings
assets’, being the foreign exchange assets. certificate’ *Section 10 (4B)
(V) ‘Non-resident Indians’ (NRIs) :- (II) ‘Proportionate capital gains tax’,
Who are ‘ither’ Indian citizen ‘or’ POIs (Persons *Section 45 where partial (not 100%) net
of Indian origin) but who are definitely (100%) consideration is invested, with in 6 (six)
non-residents ‘in India’. months in ‘abovementioned’ ‘specified
(VI) ‘Specified assets’ :- assets’/saving certificates.
(a) ‘Shares’, in an Indian (domestic) company (III) 10/20/30% , (as case may be), where
(b) ‘Debenture’, in an Indian (domestic) ‘abovementioned’ investments have been
company, ‘but not in the private limited withdrawn, ‘before’ completing 3 (three)
company’. years.
(c) ‘Deposits’, in an Indian (domestic) company,
05 Special provisions, for ‘not filling’ of
‘but not in the private limited company’.
the return of incomes, for the NRIs (only)
(d) ‘Securities’, issued by the Central govt.
*Section 115G
(e) ‘Other assets’, as specified and notified, by
the Central govt. (I) Where the NRIs are liable to Income tax,
for the (aa) Investment incomes, ‘or’ (ab)
02 Special provisions, for the computation of Long term capital gains ‘or’ (ac) Both ‘and’
total incomes of the Non-Resident Indians (also)
(NRIs) ‘only’ *Section 115D (II) TDS has (already) been deducted,
(I) ‘No deduction’, for the expenditures/ accordance with chapter XVII-B *Section 192 to
allowances are permitted, for the purpose of 206B
computing ‘investment incomes, of the NRIs
06 Special provisions, for the NRIs (only), by
‘only’.
becoming resident (in India) from Non-
(II) ‘No deductions, are permitted, under
Resident (in India) *Section 115H
Chapter-VIA *Section 80A to 80VV (I) Assessee (abovementioned) is permitted, to
(III) ‘No indexation benefits’, are permitted, take benefits, as available in chapter-XII-A,by
under the head capital gains *Section 48 furnishing a declaration to the Assessing officer
(AO) *Section 115C (f) (ii) to (v)
22 SAI CIRCULARS JUNE-2008
(II) Assessee (abovementioned) is permitted, to (I) NRIs (only) are permitted, ‘to chose’,
take benefits, ‘till’ the ‘original’ ‘foreign not to take benefits of the Chapter-XII-A.
exchange assets’ are ‘not transferred/sold’.
(II) NRIs (abovementioned) shall be liable
07 ‘Option’, for ‘not opting’, the benefits to Income tax, accordance with the
of Chapter XII-A, for the NRIs (only) other provisions of the Act (other than the
*Section 115-I special provisions of Chapter-XII-A)
DATE:
PLACE : (NAME & SIGNATURE)
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