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Union Budget 2025-26 (Full) + Finance Bill, 2025
VII. Amendment of Section 10 related to Exempt income of Non-Residents
The existing provisions of clause (4E) of section 10 of the Act provide that any income accrued or arisen to, or received by a non-resident on account of transfer of non-deliverable forward contracts or offshore derivative instruments or over the-counter derivatives, or distribution of income on offshore derivative instruments entered into with an offshore banking unit of an International Financial Services Centre referred to in sub-section (1A) of section 80LA shall not be included in the total income of the non-resident.
2. In order to further incentivize operations from the IFSC, it is proposed to amend clause (4E) of section 10 to provide that the income of a non-resident on account of transfer of non-deliverable forward contracts or offshore derivative instruments or over the-counter derivatives, or distribution of income on offshore derivative instruments, entered into with Foreign Portfolio Investors being an IFSC unit shall also not be included in the total income subject to certain conditions as may be prescribed.
3. This amendment will take effect from the 1st day of April, 2026 and shall accordingly, apply in relation to the assessment year 2026-27 and subsequent assessment years.
[Clause 6]
Full Text:
Exemption for non-resident derivative income expanded to include FPIs in IFSC units, subject to prescribed conditions. The amendment broadens clause (4E) of section 10 to exempt from a non-resident's total income income from transfer of non-deliverable forward contracts, offshore derivative instruments, over-the-counter derivatives, and distribution of income on offshore derivative instruments when entered into with Foreign Portfolio Investors that are IFSC units, subject to prescribed conditions and applicable from the notified effective assessment year onward. of Press 'Enter' after typing page number.
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