Comparison of section 214 "Tax on investment income and long-term capital gains." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....e Bill version is labelled "Old Version"; the enacted Section (Income-tax Act, 2025) shows a different table structure. Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: Both texts are framed under the rubric "Special provisions relating to non-residents and foreign company" and labelled 214. The subject is tax on investment income and long-term capital gains of an assessee who is a non-resident Indian. Both present a table with three rows corresponding to categories of income and the tax payable on each. Definitions or explanatory notes: Not stated in the document. Statutory Provision Mode Text & Scope Coverage: Both provisions apply to the total income of an assessee who is a non-residen....

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....estment income of INR X, LTCG of INR Y on a non-specified asset, and other income INR Z. Under the Bill's table, investment income + LTCG on non-specified asset would each be taxed at 20%, LTCG on specified asset (if any) at 12.5%, and remaining income at ordinary rates. (Concrete numbers: Not stated in the document.) * Example 2 (consistent with enacted Section): An NRI has investment income INR A, LTCG on a specified asset INR B, LTCG on a non-specified asset INR C, and other income INR D. Under the enacted Section, investment income A taxed at 20%, LTCG on specified asset B taxed at 12.5%, and the treatment of C is not specified in the table-thus either it falls under "rates in force" or is to be treated as part of another catego....

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....ordinarily chargeable.) - Enacted Section - Row 3: "Total income as reduced by income referred to against serial numbers 1 and 2. Rates in force." * Practical impact: Both indicate that remaining income is taxed under general rates. The enacted text's phrasing "Rates in force" is succinct but substantively aligns with the Bill's "Income-tax chargeable on such income." No difference in tax base implied for the residual amount itself, but combined with change to Row 1, the overall taxable quantum under general rates could be different. * Net effect/ambiguity regarding LTCG on assets other than "specified asset": - Bill clearly brings LTCG on non-specified assets into the special 20% charge. - Enacted Section does not mention LTCG ....

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....ons * Compliance and risk areas: The primary compliance risk arises from the divergent textual treatment of LTCG on assets other than "specified asset." Taxpayers and withholding agents (if applicable) require clarity on whether such gains attract the 20% special rate (as in the Bill) or fall outside that bracket under the enacted Section. Without explicit direction in the document, inconsistent application and disputes are likely. * Record-keeping/evidence points: Taxpayers should maintain clear documentation identifying (i) whether an asset is a "specified asset" (definition not in the document), (ii) characterisation of receipts as "income from investment" versus capital gains, and (iii) computations segregating amounts taxed at spec....