Section 115ABCentral Act

Section 115AB: [ Tax on income from units purchased in foreign currency or capital gains arising from their transfer. [Inserted by Act 49 of 1991, Section 41 (w.e.f. 1.4.1992).]

The Income-tax Act, 1961

[ Tax on income from units purchased in foreign currency or capital gains arising from their transfer. [Inserted by Act 49 of 1991, Section 41 (w.e.f. 1.4.1992).]

(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).

(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 44-C ] [* * *] [ Certain words omitted by Act 18 of 1992, Section 55 (w.e.f. 1.4.1993).][or clause (i) or clause (iii) of section 57 or under Chapter VI-A ] [Inserted by Act 49 of 1991, Section 41 (w.e.f. 1.4.1992).][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)] [ Inserted by Act 18 of 1992, Section 55 (w.e.f. 1.4.1993).];

(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 VI-A shall be allowed as if the gross total income as so reduced were the gross total income of the assessee. [Inserted by Act 49 of 1991, Section 41 (w.e.f. 1.4.1992).]

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 (23-D) of section 10 and 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

),] [ Substituted by Act 14 of 2001, Section 51, for " Central Government" (w.e.f. 1.6.2001).] [for this purpose; [Inserted by Act 49 of 1991, Section 41 (w.e.f. 1.4.1992).]

(b)"unit" means unit of a mutual fund specified under clause (23-D) 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 (

46 of 1973

);

(d)

"public sector bank" shall have the meaning assigned to it in clause (23-D) of section 10;

(e)

"public financial institution" shall have the meaning assigned to it in section 4-A of the Companies Act, 1956 (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).]

(BB)[ 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 ten per cent. if such fees for technical services are received in pursuance of an agreement made on or after the 1st day of June, 2005; and] [ Inserted by Act 18 of 2005, Section 34 (w.e.f. 1.4.2006).]

(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. [Inserted by Act 66 of 1976, Section 20 (w.e.f. 1.6.1976).]

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;

(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-A) Where the royalty referred 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 ] [Inserted by Act 29 of 1977, Section 39 and Schedule V (w.e.f. 1.4.1978).][or in respect of any computer software to a person resident in India] [ Inserted by Act 49 of 1991, Section 40 (w.e.f. 1.4.1991).][, the provisions of sub-section (1) shall apply in relation to such royalty as if the words ] [Inserted by Act 66 of 1976, Section 20 (w.e.f. 1.6.1976).][[the agreement is approved by the Central Government or where it relates to a matter] [Substituted by Act 18 of 1992, Section 54, for " such agreement is approved by the Central Government" (w.e.f. 1.6.1992).][included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy] [Substituted by Act 18 of 1992, Section 54, for " such agreement is approved by the Central Government" (w.e.f. 1.6.1992).][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:] [Inserted by Act 29 of 1977, Section 39 and Schedule V (w.e.f. 1.4.1978).][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.] [ Inserted by Act 49 of 1991, Section 40 (w.e.f. 1.4.1991).][Explanation 1] [ Explanation renumbered as Explanation 1 by Act 49 of 1991, Section 40 (w.r.e.f. 1.4.1991).].-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.[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 80-HHE.] [ Inserted by Act 49 of 1991, Section 40 (w.e.f. 1.4.1991).]

(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 ] [Inserted by Act 66 of 1976, Section 20 (w.e.f. 1.6.1976).][purposes of the 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.] [ Substituted by Act 49 of 1991, Section 40, for " purposes of the proviso" (w.r.e.f. 1.4.1991).]

(3)

[ No deduction in respect of any expenditure or allowance shall be allowed to the assessee under sections 28 to 44-C 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 VI-A;

(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 VI-A 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 sub-section (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.]

Sec 115A — [ Tax on dividends, royalty and technical service fees in the case of foreign companies. [Inserted by Act 66 of 1976, Section 20 (w.e.f. 1.6.1976).]

Sec 115ACA — Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer

Disclaimer: This section is reproduced for general informational and reference purposes only. Always verify against the latest official gazette and consult a qualified advocate before relying on any provision.