Comparison of Section 207 "Tax on dividends, royalty and fees for technical service in case of foreign companies." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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.... certain instruments, income arising from units of mutual funds/UTI purchased in foreign currency, royalties and technical service fees. It prescribes specified tax rates for these incomes and limits deductions; the provision affects taxpayers who are non-resident individuals and foreign companies, as well as Indian deductors. Effective date or enactment timing: Not stated in the document. Statutory Provision Mode Text & Scope Clause 207 of the Income Tax Bill, 2025 (Old Version) sets out special tax treatment for non-residents (not being a company) and foreign companies where their total income includes specified categories: dividends, certain interest receipts, distributed income, income in respect of units of specified mutual funds/UT....

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....ed by the Central Government (if with an Indian concern) or conforming to then-current industrial policy. Sub-section (3) narrows the application of sub-section (2) for royalty payments that are consideration for transfer/grant of rights in copyright of a book to an Indian concern or in respect of computer software to a person resident in India: in those cases sub-section (2) applies "without application of provisions of clause (a) or (b) of that sub-section." Other provisos: definitions limiting "computer software" and cross-reference to section 59 for certain excluded incomes. Illustrations * Example 1: A non-resident (not being a company) receives dividends (not from an IFSC unit) and no other income. The dividend income is taxed at 2....

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.... Document 1 the column C heading is "Rate of Income-tax payable" and for the final row (Sl. No. 8) it reads "Rates in force." In Document 2 the corresponding column heading is "Income-tax payable" and the final row reads "Income-tax chargeable on such income." * Practical impact: the Act text (Document 1) appears to fix the phrase to indicate specified rates for listed items and uses "Rates in force" for residual income; the Bill uses a more general phrase. Substantively both convey that normal rates apply to residual income; difference is terminological and unlikely to alter tax computation in practice. * Sub-section (4)(a) - Definition of "computer software": Document 1 states "or any customised electronic data or any product or servi....

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....e references and treatment: Document 1 specifies "no deduction shall be allowed under Chapter VIII and Schedule XV" when gross total income consists only of the incomes listed; Document 2 states "no deduction shall be allowed under Chapter VIII" (no mention of Schedule XV). * Practical impact: Document 1 narrows allowances further by expressly excluding Schedule XV deductions in the single-income scenario; Document 2 does not include that express exclusion. This difference potentially alters whether certain Schedule XV deductions remain available. The practical effect depends on what Schedule XV contains (Not stated in the document). * Overall syntactic and typographical corrections: Document 1 shows tightened punctuation, clearer table....