Comparison of Section 210 "Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....ted: (1) Section 210 of the Income-tax Act, 2025 (consolidated/authoritative statutory version) and (2) Clause 210 of the Income Tax Bill, 2025 - Old Version (legislative draft). The provision prescribes special tax treatment and rates for specified funds and Foreign Institutional Investors (FIIs) on income from securities and capital gains. Affected parties: Foreign Institutional Investors, specified funds, and, indirectly, Indian revenue authorities and intermediaries administering tax withholding/compliance. Effective date / decision date: Not stated in the document. Background & Scope Statutory hooks: The provision is located among "Special provisions relating to non-residents and foreign company." It cross-references sections 173(c),....

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....der s.196) from transfer of such securities - 30%; (3) short-term capital gains under s.196 - 20%; (4) long-term capital gains (not under s.198) from such transfers - 12.5%; (5) long-term capital gains under s.198 exceeding Rs.125,000 - 12.5%; (6) total income as reduced by items 1-5 - taxed at rates in force / income-tax chargeable (textual variance between documents). The section prescribes computation limits for specified funds (attributable to units held by non-residents), special application to investment divisions of offshore banking units fulfilling Schedule VI criteria, denial of certain deductions where gross total income consists only of category (1), transitional treatment of gross total income for deduction computations, and exc....

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.... VIII allowed as if the reduced gross total income were the gross total income. (e) Section 72(6) shall not apply to computation of capital gains in Sl. No.2-5. These provisos are explicit in the texts provided. Illustrations * Example 1: An FII earns dividend/interest (income in respect of securities) of X and short-term capital gains (not under s.196) of Y. Tax on X will be computed at 20%; tax on Y at 30%; any remaining income will be taxed at rates in force (or as the act prescribes). (Consistent with text; numerical figures are illustrative only.) * Example 2: A specified fund has gross total income consisting only of securities income; it will be denied deductions u/ss 28-58 (or 26-61 depending on text) and Chapter VIII as specif....

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....rresponding income specified in column B"). * Practical impact: No substantive change in tax incidence; the statutory version clarifies computation method by explicit reference to applying the rate to corresponding income. * Denial of deductions - cross-references differ: The Bill refers to denial of deductions under "sections 26 to 61 or section 93(1)(a) or (e) or under Chapter VIII;" the Section 210 text refers to "sections 28 to 58, 60 and to 61 or section 93(1)(a) or (e) or under Chapter VIII." * Practical impact: The statutory text's citation differs in range; this is potentially substantive if it includes/excludes particular sections. The document does not explain rationale for the change. Which precise sections are intended....

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....r so specified" and in the other "means such investor as specified in a notification." * Practical impact: Minor drafting difference without clear substantive impact in the documents provided. Practical Implications * Segregation and computation: Assessing FIIs and specified funds must segregate income into specified categories and apply prescribed fixed rates to those categories. Records must support classification of income as "income in respect of securities," short-term or long-term capital gains, and whether such gains fall u/ss 196/198. (The precise calculation methods for attribution and exclusions are Not stated in the document.) * Deduction denial: Where gross total income consists only of securities income, many deductions ....