Loading...

⚠ ✕
❮ 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 characters 0/2000
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 ✕
🔎 Filters / Advanced Search ❯
TEXT

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.
Relevance Default Date
    Manuals Income Tax
    Example: 2) The details of House property are as follows: Municipal value: 60,000, Fair rent: 68,00...
    Manuals Income Tax
    Example: 1)The details of House property are as follows: Municipal value: 60,000, Fair rent: 68,000...
    Manuals Income Tax
    What does building or land appurtenant includes?
    Manuals Income Tax
    Mr. Ram annually earns ₹ 3,00,000 (after all deductions) and pays an annual rent of ₹ 1,...
    Manuals Income Tax
    Documentation required for claiming deduction U/s. 80G?
    Manuals Income Tax
    Deduction if donation deducted from Salary and donation receipt certificate is on the name of employ...
    Manuals Income Tax
    Whether donations made to foreign trusts qualify for deduction under this section?
    Manuals Income Tax
    What are the specified diseases and ailments for the purpose of deduction under section 80DDB?
    Manuals Income Tax
    I have a handicapped dependent who is my cousin ( Daughter of my mother’s sister). She is complete...
    Manuals Income Tax
    Mr. X is a pensioner and his pension is less than his son’s salary. His daughter is a disabled dep...
    Manuals Income Tax
    Who can be your disabled dependent?
    Manuals Income Tax
    What is considered as disability and Severe Disability?
    Manuals Income Tax
    If office deducts salary for medical insurance for employee and his family, whether the employee can...
    Manuals Income Tax
    Can somebody having invested the amount from income exempt from tax or by taking loan, claim deducti...
    Manuals Income Tax
    An individual assessee pays (through any mode other than cash) during the previous year medical insu...
    Manuals Income Tax
    Part contribution ?
    Manuals Income Tax
    Mr A, new retail investor has invested in listed equity share/units of equity oriented fund of Rajiv...
    Manuals Income Tax
    X deposit 1,10,000 in PPF & made a contribution of 410,000 to annuity policy of LIC (eligible for de...
    Manuals Income Tax
    X deposit 41,000 in PPF & made a contribution of 1,10,000 to annuity policy of LIC (eligible for ded...
    Manuals Income Tax
    Suppose Mr. has paid premium of 25,000 for policy A taken on 30th June 2011 (sum assured 2,00,000) a...
❮
❯
❯❯
Maximize Maximize Maximize
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 Summaries Hide All Summaries
Manuals Income Tax
Show AI Summary
Gross Annual Value rule for house property: higher of municipal or fair rent subject to standard rent cap.
Determination of Gross Annual Value requires taking the higher of municipal value or fair rent as the annual lettable value, provided it does not exceed the standard rent; the Gross Annual Value is then the greater of this lettable value and the actual annual rent received excluding unrealised rent.
Manuals Income Tax
Show AI Summary
Gross Annual Value rule: ALV equals the higher of municipal value or fair rent but capped at standard rent.
Annual Letting Value (ALV) is the higher of municipal value and fair rent but capped at the standard rent; with municipal value 60,000, fair rent 68,000 and standard rent 62,000 the ALV (and Gross Annual Value under the cited clause) is 62,000. Annual rent received excluding unrealised rent is 60,000, which is recorded separately from the statutory ALV used to determine Gross Annual Value.
Manuals Income Tax
Show AI Summary
Building and land appurtenant defined: includes residential and commercial structures and adjoining land like gardens.
For house property chargeability, building includes residential, factory, office, shop, godown and other commercial premises, while land appurtenant means land connected with the building such as gardens and garages, establishing which assets constitute house property for income assessment.
Manuals Income Tax
Show AI Summary
Deduction under Section 80GG determined as the least of three statutory measures; example illustrates rent-based cap applies.
Deduction under Section 80GG is the least of: (1) Rs. 2,000 per month (Rs. 24,000 per annum); (2) rent paid less 10% of total income; and (3) 25% of total income. In the supplied example with total income of Rs. 3,00,000 and rent paid Rs. 1,50,000, the three measures are Rs. 24,000; Rs. 1,20,000; and Rs. 75,000 respectively, so Rs. 24,000 is the allowable deduction under the prescribed formula.
Manuals Income Tax
Show AI Summary
Deduction under 80G requires a stamped receipt showing the trust's registration number and valid registration on donation date.
Deduction u/s. 80G requires a stamped receipt evidencing the donation that records the trust's registration number for 80G, and the trust's registration must be valid on the date the donation is made; lacking validity or the registration number on the receipt affects entitlement to the deduction.
Manuals Income Tax
Show AI Summary
Donation deduction eligibility: employer certificate confirming salary deduction enables employee claim of 80G deduction on donations.
Employees may claim a deduction under 80G where the employer provides a certificate stating the contribution was made from the employee's salary account; that employer statement operates as the operative documentary basis for the employee's deduction claim even if the donation receipt is in the employer's name.
Manuals Income Tax
Show AI Summary
Deductibility of donations: eligibility hinges on whether the recipient trust meets qualifying donee and compliance requirements.
Whether donations to foreign trusts qualify for deduction under section 80G is a focused eligibility question hinging on whether the recipient trust is a qualifying donee and whether its registration, recognition, domicile or jurisdictional status and accompanying documentary proof and procedural compliance satisfy the statutory conditions for claiming a deduction.
Manuals Income Tax
Show AI Summary
Deduction for specified diseases: treatment costs for listed serious neurological, oncological, renal and hematological ailments qualify.
Deduction for medical treatment is available for specified diseases and ailments: neurological disorders (including certified disability of 40% or above, dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia, Parkinson's), malignant cancers, full blown AIDS, chronic renal failure, and hematological disorders such as hemophilia and thalassaemia.
Manuals Income Tax
Show AI Summary
Deduction under section 80DD: a cousin does not qualify as a dependent for claiming the deduction.
The statutory dependent definition limits eligible relatives to spouse, children, parents, brothers, sisters, spouse's siblings, and parents' siblings; a cousin (daughter of mother's sister) is excluded, so expenses for her maintenance and medical treatment cannot be claimed as a deduction.
Manuals Income Tax
Show AI Summary
Disability deduction eligibility: a dependent sibling may claim 80DD deduction if financially supporting the disabled dependent.
An Assessing Officer's objection that the son cannot claim the deduction because Mr. X receives pension is incorrect. Deduction under section 80DD covers dependents including brothers and sisters; the son may claim the deduction if the disabled daughter is dependent on him. The son should furnish an undertaking from Mr. X confirming the daughter's dependency on the son rather than on Mr. X.
Manuals Income Tax
Show AI Summary
Disabled dependent eligibility for income tax deductions requires relatives or HUF members to be wholly or mainly dependent.
Eligibility for deductions requires that the disabled person be wholly or mainly dependent on the claimant for support and maintenance. For individuals, eligible dependents include spouse, children, parents, brothers and sisters. For a HUF, any member of the HUF may be treated as a disabled dependent for claiming the deduction.
Manuals Income Tax
Show AI Summary
Disability definition sets qualifying conditions and severity thresholds for income-tax deductions for specified impairments under tax law.
Definition of disability for income-tax deductions under sections 80DD and 80DDB follows the Persons with Disabilities Act, 1995, listing impairments such as blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation, mental illness, autism, cerebral palsy and multiple disabilities; a person is considered disabled when impairment is not less than 40%, and severe disability is an impairment of 80% or more, which determine eligibility for the specified deductions.
Manuals Income Tax
Show AI Summary
Health insurance deduction allowed when employee bears premium paid non-cash and obtains employer certificate confirming the deduction.
A deduction under section 80D is available where the employee has paid medical insurance premiums for himself and/or his family by a non-cash mode; the employee should obtain an employer's certificate confirming deduction of the amount for medical insurance purposes.
Manuals Income Tax
Show AI Summary
Deduction under section 80D requires payment from taxable income; payments from exempt income or loans disqualify.
Deduction under section 80D is available only where the payment is made out of income chargeable to tax; payments from tax-exempt income or from borrowed funds do not qualify for the deduction.
Manuals Income Tax
Show AI Summary
Medical insurance deduction under 80D varies by parental senior citizen status, affecting combined family and parental premium allowances.
Deduction under 80D allows an individual who pays medical insurance premiums other than in cash to claim a deduction for premiums for the assessee, spouse and dependent children as one component and for parental premiums as a separate component; the total allowable deduction depends on whether any parent is a senior citizen, with a higher combined deduction if a parent is a senior citizen.
Manuals Income Tax
Show AI Summary
Deduction under section 80D: contributors who pay health insurance premiums non cash may claim proportional deductions
Contributors who partly pay health insurance premiums may each claim a deduction equal to the amount they actually paid, provided each share is paid directly to the insurer and by a mode other than cash; in such cases each payer may claim the deduction against their respective taxable income.
Manuals Income Tax
Show AI Summary
Deduction under 80CCG limited by eligible investment percentage and income threshold, with recapture on scheme violation.
Deduction under the Rajiv Gandhi Equity Savings Scheme is computed as a percentage of eligible investments in listed equity shares and equity oriented fund units but is restricted by a monetary ceiling; sale of previously qualifying units can breach scheme conditions and cause partial recapture as taxable income; exceeding the prescribed gross total income threshold disqualifies the taxpayer from claiming the deduction for that year.
Manuals Income Tax
Show AI Summary
Deduction under section 80CCE limits combined 80C and 80CCC claims for contributions to savings instruments.
Contributions to Public Provident Fund and an annuity policy eligible under Section 80CCC are deductible but subject to the aggregate ceiling under Section 80CCE; when combined eligible deductions across Sections 80C and 80CCC exceed the statutory limit, the deductible amount is restricted to that ceiling and any excess is disallowed.
Manuals Income Tax
Show AI Summary
Aggregate deduction under section 80CCE limits combined 80C and 80CCC contributions to the statutory overall ceiling.
Contributions to a public provident fund and annuity policy premiums are aggregated and the deductible amount is the lesser of the combined eligible contributions and the statutory aggregate ceiling; when the combined total exceeds that ceiling, the deduction is restricted to the statutory limit.
Manuals Income Tax
Show AI Summary
Deduction under 80C: eligible life insurance premiums allowed up to policy ceilings; excess disallowed; one policy's maturity taxable.
Deduction under Section 80C allows life insurance premiums up to policy wise ceilings based on a percentage of the sum assured. Policy A (sum assured 200,000) with a ceiling of 20% permits the full 25,000 premium as deductible; Policy B (sum assured 100,000) with a ceiling of 10% permits only 10,000 of the 12,000 premium as deductible. The total deduction equals the aggregate of eligible premiums, and Policy B's maturity proceeds are not exempt from tax.

TMI Notes

Back

All TMI Notes

Showing Results for :
Reset Filters
No Records Found

TMI Notes

Back

All TMI Notes

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

Acts Income Tax