Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ----
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    Case LawsIncome Tax
    Jurisdictional Prerequisites for Initiating Reassessment u/s 148: Non-Depoist of TDS by the Employer
    Case LawsIncome Tax
    Revisiting the Scope of "Record" u/s 263: Embracing Subsequent Records
    Case LawsIncome Tax
    Interpreting "Record": Revisiting the Scope of Revision Powers u/s 264 and Rectification of Mistake ...
    The Doctrine of Natural Justice in GST Proceedings: A Case Study on Show Cause Notice u/s 74"
    Input Tax Credit (ITC) and the Concept of "Plant" under GST: Supreme Court
    Case LawsCustoms
    Inordinate Delay in Adjudication: High Court's Stance on Quashing Show Cause Notices
    Case LawsCustoms
    Inordinate Delay in Adjudication: Upholding the Principles of Natural Justice
    Case LawsIncome Tax
    Supreme Court Upholds Validity of Re-Assessment Notices Issued During COVID-19 Lockdown
    Case LawsIndian Laws
    Unraveling the Mineral Rights Regime: The Supreme Court's Landmark Judgment
    Case LawsIncome Tax
    Navigating the Faceless Assessment Regime: A Judicial Perspective
    Case LawsIncome Tax
    Evidentiary Value of Statements Recorded During Income Tax Surveys: A Judicial Analysis
    Case LawsIncome Tax
    Faceless Assessment: Ensuring Compliance with Statutory Provisions
    Case LawsIncome Tax
    Faceless Assessment Mechanism: Jurisdictional Limits in Income Tax Proceedings
    Case LawsIncome Tax
    Reassessment Notices for AY 2013-14: Upholding the Doctrine of Limitation
    Principles of Tax Fairness and Mens Rea: Quashes Penalty for Mere Technical Errors
    Case LawsIncome Tax
    Decoding the Mandatory Timelines: A Thorough Examination of the Income Tax Assessment Order Nullific...
    Expiry of E-Way Bill AND Mens Rea: Technical Violation Alone Insufficient for Penalty Imposition
    Maintainability of Appeals: High Court Upholds Strict Interpretation of Limitation Provisions in GST...
    Case LawsIncome Tax
    Stay of Tax Demand: Interpreting the Discretionary Power u/s 220(6) of the Income Tax Act
    Case LawsIncome Tax
    Interpreting "Technical Services" under Tax Treaties: A Comprehensive Analysis
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Case LawsIncome Tax
    Show AI Summary
    Jurisdictional prerequisite: notice in the name of a deceased person invalidates reassessment initiation under Section 148.
    A notice under Section 148 issued in the name of a deceased person is a jurisdictional defect because a valid notice to the correct person is a condition precedent to reopening an assessment; legal representatives have no statutory duty to intimate death; where salary tax has been deducted at source, reassessment cannot be pursued against the deceased or their representatives, and employer non-deposit of TDS does not create an outstanding demand against the assessee or their legal representatives.
    Case LawsIncome Tax
    Show AI Summary
    Revisional power: Commissioner may consider subsequent records available at time of examination in tax proceedings.
    The Court construed the Commissioner's revisional power to permit consideration of all materials relating to the proceeding that are available at the time of his examination, including documents and valuation reports that came on the file after the assessment order; the Explanation to the provision was read as clarificatory, giving an inclusive meaning to "record" rather than restricting it to what the Assessing Officer had when passing the assessment.
    Case LawsIncome Tax
    Show AI Summary
    Revision powers under section 264: Commissioner must consider expanded record and rehear revision petitions on merits.
    The Court held that the Commissioner must consider a revision petition on its merits and that the term record in revision proceedings extends beyond the return and assessment order to include material from other sources and prior assessments. It emphasised consistency in treatment of continuing transactions and required the Principal Commissioner to take into account all relevant materials, identify any apparent mistakes, afford a personal hearing, and pass a reasoned order within a short timeframe.
    Case LawsGST
    Show AI Summary
    Natural justice in tax proceedings: show cause notices must allege fraud or concealment before enhanced recovery is invoked.
    The court quashed the enhanced-provision show cause notice for failing to allege the essential elements of fraud, willful misstatement, or suppression of facts and held that the enhanced regime may be invoked only when the adjudicating authority is prima facie satisfied of those elements and records that satisfaction in the notice; absent such express allegations the proceedings are without jurisdiction though fresh proceedings may be initiated with a proper notice.
    Case LawsGST
    Show AI Summary
    Plant classification under GST: functionality test determines ITC eligibility for buildings serving special technical requirements.
    The expression plant or machinery in Section 17(5)(d) of the CGST Act must be interpreted by reference to functionality rather than by equating it with the statutory definition of "plant and machinery." A building qualifies as a plant for ITC purposes if, on the facts, it was planned and constructed to serve the assessee's special technical or operational requirements. The functionality test is fact-specific and requires case-by-case analysis of the building's role in the assessee's business.
    Case LawsCustoms
    Show AI Summary
    Inordinate delay in adjudication bars further proceedings on stale show cause notices absent a reasonable explanation.
    The court found the delay from 2008 to 2021 inordinate and unexplained, concluding the respondents did not provide a reasonable explanation; the delayed transfer to the call book without intimation breached statutory intimation requirements, and established precedent limits reliance on higher authority to excuse gross unexplained delays in adjudication of show cause notices.
    Case LawsCustoms
    Show AI Summary
    Inordinate delay in adjudication undermines procedural fairness and bars continuation of prolonged, unexplained proceedings.
    The court found that prolonged, unexplained delay in adjudicating a show cause notice breached procedural fairness and natural justice, causing irretrievable prejudice by impairing evidence preservation and business planning. Delay attributable to the revenue authorities, contrary to Tribunal directions for timely disposal, rendered continuance of proceedings unsustainable and emphasized the necessity of justifying delay and ensuring timely adjudication.
    Case LawsIncome Tax
    Show AI Summary
    Pandemic relief legislation upheld: re-assessment notices issued during lockdown remain valid despite later procedural rule.
    The court interpreted the pandemic relief legislation as providing comprehensive relief that extended to procedural obligations in force at the time of issuance, not confined solely to extensions of time. It applied the principle that statutes operate prospectively and concluded the later-introduced procedural provision does not apply retrospectively to invalidate earlier-issued re-assessment notices, limiting its analysis to the validity of issuance and not the merits of re-assessment proceedings.
    Case LawsIndian Laws
    Show AI Summary
    Central legislative competence over mineral regulation affirmed; royalties characterised as compensation for resource depletion, limiting state levies.
    The Court concluded that the central legislative framework occupies the field of mineral regulation and that royalties are compensation for depletion of state-owned natural resources, not conventional taxes; consequently the Centre may impose such levies while States remain constrained from imposing royalties in the nature of compensation that would encroach on the Centre's exclusive regulatory domain.
    Case LawsIncome Tax
    Show AI Summary
    Faceless assessment mechanism requires reassessment steps to follow a centralized faceless procedure, otherwise territorial officer lacks jurisdiction.
    The Scheme framed under the enabling provision must be read to include preliminary proceedings linked to reassessment, so that reassessment initiation and related steps follow the faceless mechanism; concurrent exercise of territorial and faceless functions would undermine the Scheme's purpose and render steps taken outside the faceless protocol inconsistent with the statutory framework.
    Case LawsIncome Tax
    Show AI Summary
    Evidentiary value of survey statements: survey disclosures lack conclusive weight and require independent corroboration.
    Statements recorded during a tax survey are permissive and not taken on oath, so they are not conclusive evidence by themselves; they cannot be treated as inherently incriminating material to justify reopening assessments or making additions without independent corroboration, and must be recorded free of coercion in line with administrative instructions and judicial precedents.
    Case LawsIncome Tax
    Show AI Summary
    Faceless assessment jurisdiction: JAO lacked authority under the statutory faceless procedure, invalidating improperly issued notices.
    The court determined that reassessment notices and related proceedings were inconsistent with the statutory faceless assessment framework because they were issued without following the prescribed allocation of jurisdiction and procedural sequence under the faceless mechanism; administrative orders purportedly exempting cases were not read to displace the statutory requirements and earlier precedent interpreting the faceless provisions was applied.
    Case LawsIncome Tax
    Show AI Summary
    Faceless Assessment: statutory scheme governs jurisdiction and extends to central and international taxation proceedings.
    The court analysed Section 151A read with Sections 144B and 148A and held that administrative instructions dated March 31, 2021 and September 6, 2021 issued under section 119 apply only to assessment orders and do not extend to proceedings under Sections 148A and 148; those instructions cannot be read into the scheme notified on March 29, 2022. The mandatory faceless procedure under Sections 144B and 151A applies to notices and proceedings, including central charges and international taxation charges, and notices issued outside that mechanism fall outside the statutory jurisdictional framework.
    Case LawsIncome Tax
    Show AI Summary
    Doctrine of limitation prevents revival of lapsed reassessment powers; administrative instructions cannot "travel back in time."
    The court held that when the right to reopen assessment had already lapsed under the pre amended limitation regime, subsequent amendments or administrative instructions could not revive that right; administrative attempts to "travel back in time" and extend limitation were invalid, assessees retain the defence of limitation, and pandemic era notifications did not cover years whose limitation had already expired.
    Case LawsGST
    Show AI Summary
    Mens rea requirement in tax penalties: technical errors without intent cannot justify penalty imposition under GST compliance.
    Requirement of mens rea for imposition of tax penalties is central where e Way Bill compliance is questioned. Mere procedural or timing inconsistencies, without evidence of intent to evade tax and where valid tax invoices accompany the goods and tax has been charged, do not justify penal action. Authorities must establish culpable intent with cogent reasoning and comply with procedural and natural justice safeguards before imposing penalties.
    Case LawsIncome Tax
    Show AI Summary
    Mandatory timelines under Section 144C require assessments to be completed within the prescribed month after DRP direction, else invalid.
    Once the DRP framed directions, the Assessing Officer was obliged to complete the assessment in conformity with those directions within one month from the end of the month in which the DRP's direction was served; service by uploading the DRP directive on the ITBA portal constitutes valid service for computing that period. The procedure does not envisage further involvement of the Transfer Pricing Officer once the DRP's direction is issued and an order under the transfer pricing provision has been remitted to the AO.
    Case LawsGST
    Show AI Summary
    Mens rea requirement: technical expiry of an e way bill alone cannot justify a tax penalty without intent to evade.
    The court held that a purely technical lapse in E Way Bill formalities - where goods were otherwise covered by two e invoices and two E Way Bills and there was no dispute on consignor, consignee or goods - does not demonstrate the mens rea necessary to impose a penalty under the tax penal provision; authorities' focus on the expired E Way Bill alone was legally insufficient given documentary explanations and absence of intent to evade tax.
    Case LawsGST
    Show AI Summary
    Exclusion of Limitation Act: GST Act's specific appellate time limits operate as a self contained code, barring general extensions.
    The court analysed whether the GST Act's appellate limitation regime operates as a complete code excluding the general Limitation Act. It applied the principle that fiscal statutes with detailed procedural and temporal rules are to be strictly construed, treating the special statute's limitation provision as implying exclusion of the Limitation Act's extension mechanism, and emphasised policy aims of expeditious dispute resolution, revenue certainty and administrative finality.
    Case LawsIncome Tax
    Show AI Summary
    Assessing Officer discretion in granting stay of tax demand cannot be rigidly constrained by administrative OMs, requiring case specific consideration.
    The Assessing Officer's discretionary power under section 220(6) to grant stay of tax demand is not fettered by CBDT Office Memorandums; those OMs are administrative guidelines and do not mandate a uniform pre deposit. The AO must consider prima facie case, likelihood of success, and undue hardship and may require a higher, lower or no deposit depending on case specific facts. Administrative adjustment of refunds without considering a pending stay application was held arbitrary and the matter was remitted for reconsideration applying these principles.
    Case LawsIncome Tax
    Show AI Summary
    Technical services interpretation requires specialized expertise and a demonstrable link to payments for withholding tax consequences.
    Interpretation of technical services under the India Ireland DTAA requires the application or transfer of specialized knowledge, skill or expertise; incidental training or assistance enabling a reseller to market standard software does not meet that threshold. The Reseller Agreement did not contemplate technology transfer or bespoke solutions, payments were tied to reseller net revenue, and the record lacked material linking remittances to customized technical services. Authorities must establish an evidentiary and contractual nexus between payments and provision of specialized technical services before applying withholding tax under the treaty.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Comparison of Section 208 "Tax on income from units purchased in foreign currency or capital gains arising from their transfer." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      5 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Section 208 Tax on income from units purchased in foreign currency or capital gains arising from their transfer.

      Income-tax Act, 2025

      At a Glance

      The provided document is Clause 208 of the Income Tax Bill, 2025 - (Old Version), titled "Tax on income from units purchased in foreign currency or capital gains arising from their transfer." It prescribes special tax treatment for "overseas financial organisations" investing in specified Indian units. The provision affects offshore funds and, indirectly, specified mutual funds and public financial institutions. Effective date or enactment timing: Not stated in the document.

      Background & Scope

      Statutory hooks: Clause 208 is located in the Bill under the heading "Special provisions relating to non-residents and foreign company." It provides a targeted tax regime for an "overseas financial organisation" (Offshore Fund) that invests in India under arrangements with specified Indian entities and with SEBI approval. The clause covers income received in respect of units purchased in foreign currency, long-term capital gains on transfer of such units, and the balance of total income. Definitions provided in the clause include "overseas financial organisation," "public financial institution" (by reference to section 2(72) of the Companies Act, 2013), and "unit" (unit of a mutual fund specified in Schedule VII or the Unit Trust of India). Contextual policy objectives: Not stated in the document.

      Statutory Provision Mode

      Text & Scope

      The clause creates a composite tax structure for Offshore Funds. The tax payable is determined by a table with three categories:

      • Income received in respect of units purchased in foreign currency - Income-tax payable stated as "10%."
      • Long-term capital gains arising from transfer of such units - Income-tax payable stated as "12.5%."
      • "Total income as reduced by income referred to in against serial numbers 1 and 2" - tax treatment described as "Income-tax chargeable on such income."

      Paragraph (2) addresses deduction limitations: where the Offshore Fund's gross total income consists only of the unit income or long-term capital gains (or both), no deductions are allowed u/ss 26-61 or section 93(1)(a) and (e) or under Chapter VIII. If gross total income includes such income along with other income, the clause requires that the gross total income be reduced by the unit incomes for the purpose of allowing Chapter VIII deductions "as if" the reduced gross total income were the fund's gross total income.

      Interpretation

      The clause establishes a preferential/segregated tax treatment for certain categories of income of Offshore Funds rather than taxing the whole global income under general rates. The table reflects source-specific rates (10% and 12.5%) and contemplates residual income taxed under ordinary provisions. The language in paragraph (1) as drafted in the Bill treats the column C entries as amounts payable; given those are percentages, interpretation requires reading them as rates. The clause also attempts to ring-fence specified incomes for limited deduction access, suggesting a legislative intent to limit deduction claims against the preferred categories. Legislative intent beyond the text: Not stated in the document.

      Exceptions/Provisos

      Paragraph (2) provides the principal exception: where the fund's gross total income consists solely of the specified unit incomes, the clause disallows a broad swathe of deductions (sections 26-61, section 93(1)(a) & (e), and Chapter VIII). Where specified incomes form part of a mixed income stream, the specified incomes are to be segregated out for deduction computation purposes so that Chapter VIII deductions are allowed on the residual gross total income. Any other provisos or carve-outs: Not stated in the document.

      Illustrations

      • Example 1: An Offshore Fund has only income of 10 million INR from units purchased in foreign currency. Under the clause, that income would be subject to 10% tax; no deductions u/ss 26-61 or Chapter VIII would be allowable. The document does not state whether tax computation permits exemptions or credits; hence further computation specifics: Not stated in the document.
      • Example 2: An Offshore Fund has 10 million INR of unit income (subject to 10%) and 2 million INR of other income. The clause directs that the gross total income be reduced by the unit income for deduction purposes and that Chapter VIII deductions be allowed as if the reduced gross total income (2 million) were the gross total income. The document does not state how Chapter VIII deductions interact with other statutory reliefs or whether the 10% rate applies after or before such segregation for other taxes: Not stated in the document.

      Interplay

      The clause cross-references several statutory provisions: section 93(1)(a)/(e), Chapter VIII (deductions), sections 26-61, and the Companies Act definition for "public financial institution" (section 2(72)). It also references Schedule VII entries for identifying eligible mutual funds and requires SEBI approval for the arrangement. No implementing Rules, Notifications, or Circulars are cited in the Bill text provided. Where interaction with other tax provisions or double taxation treaties may arise: Not stated in the document.

      Differences Between Section 208 of the Income-tax Act, 2025 and Clause 208 of the Income Tax Bill, 2025 - (Old Version) and Practical Impact

      The two texts are substantially similar in structure and substantive content. Key textual differences and their practical impact are as follows:

      • Terminology for tax computation (Table column heading): The Act version (Section 208) states "Rate of income-tax payable" in column C, whereas the Bill (Clause 208 old version) uses "Income-tax payable" and, for item 3, "Income-tax chargeable on such income."
        • Practical impact: None substantive - both convey that fixed rates apply for specified incomes and the prevailing rates apply to the balance; the Act wording is marginally clearer in signalling rate-based computation.
      • References to section numbers for disallowance/deductions: Section 208 (Act) disallows deductions under "sections 28 to 58, 60 and 61 or section 93(1)(a) or (e) or under Chapter VIII"; Clause 208 (Bill) disallows deductions under "sections 26 to 61 or section 93(1)(a) and (e) or under Chapter VIII."
        • Practical impact: Potential substantive difference - the Bill's broader range (sections 26-61) would exclude more deductions if it were applied; the Act's narrower list (28-58, 60, 61) narrows the exclusion. If the Act text is authoritative, certain deductions falling in sections 26-27 or 59 would remain available; conversely, the Bill's earlier drafting would have disallowed those. The provided materials do not state legislative intent for this change.
      • Computation language for aggregate tax: Section 208(1) (Act) states the tax "shall be the aggregate of income-tax computed at the rate specified in the column C applied on the corresponding income specified in column B." The Bill phrasing said "shall be the aggregate of the amount specified in column C thereof."
        • Practical impact: The Act wording better describes rate application (rate x income); the Bill wording could be read as implying fixed amounts in column C. However, because column C contains percentage figures, the Act wording reduces ambiguity. The documents do not state any consequential computational rules beyond the table.

      Practical Implications

      • Compliance and risk areas grounded in the clause: Offshore Funds must establish that (i) the investment arrangement is with an eligible public sector bank, public financial institution or specified mutual fund; and (ii) the arrangement has SEBI approval. The clause conditions preferential tax treatment on these qualifying facts; documentation and SEBI approval evidence will be material. Any procedural details or documentary standards: Not stated in the document.
      • Record-keeping/evidence points suggested by the text: maintain records of the arrangement with Indian entities, SEBI approval, characterization of units as "purchased in foreign currency," computation segregating incomes and application of the specified rates. The clause does not prescribe exact records or timeframes for retention: Not stated in the document.

      Key Takeaways

      • Clause 208 creates a separate tax regime for Offshore Funds investing in specified Indian units with SEBI-approved arrangements.
      • Specified incomes are taxed at 10% (income from units purchased in foreign currency) and 12.5% (long-term capital gains on transfer of such units); other income is taxed under ordinary provisions.
      • Deductions are broadly restricted where an Offshore Fund's gross total income consists solely of the specified incomes (disallowance stated for sections 26-61, section 93(1)(a) & (e), and Chapter VIII).
      • Where specified incomes coexist with other income, the clause requires segregation so Chapter VIII deductions apply to the residual income "as if" that residual were the gross total income.
      • Definitions and eligibility pivot on arrangements with specified Indian entities and SEBI approval; precise procedural and evidentiary requirements are not set out in the Bill text.
      • Certain drafting differences between the Bill and the later Act text (e.g., the range of sections listed for disallowance and the phrasing of tax computation) may affect deduction availability and interpretive clarity.

      Full Text:

      Section 208 Tax on income from units purchased in foreign currency or capital gains arising from their transfer.

      Topics

      ActsIncome Tax