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
    Case Laws Income Tax
    Judicial Scrutiny of Residential Status and Jurisdictional Shift in Income Tax Cases
    Case Laws Income Tax
    Scrutinizing the Genuineness of Gifts in Income Tax Law: Taxability of Gift u/s 68
    Case Laws Income Tax
    Interpreting TDS Liability u/s 194-I against Lease Payments: A Legal Analysis of Security Deposit vs...
    Case Laws Income Tax
    Evaluating Jurisdictional Validity in Taxation: The Significance of Draft Assessment Orders under Se...
    Case Laws Income Tax
    Breaking Down the Supreme Court's Decision on Double Taxation Avoidance Agreements
    Case Laws Income Tax
    Balancing Sovereignty and Law: India's Treaty-Making Powers and Domestic Enforcement
    Case Laws Income Tax
    Navigating DTAAs: A Comparative Analysis of India, Netherlands, France, and Switzerland
    Case Laws Income Tax
    The OECD Membership Puzzle: Interpreting 'Is' in Double Taxation Agreements
    Case Laws Income Tax
    The Dual Life of Treaties: Understanding Their Enforcement in Indian Law
    Case Laws Income Tax
    Assessment Proceedings and Validity of Section 143(2) Notices: Jurisdictional Clarity and Monetary L...
    Case Laws Income Tax
    Unexplained Cash Deposits and Section 115BBE: Applicability of Higher Rate of Tax
    Case Laws Income Tax
    Section 127 of the Income Tax Act: A Case Study on Jurisdictional Transfer
    Case Laws Income Tax
    Interpreting Sections 22, 23, and 24: Taxation of Notional Rental Income from House Property and Vac...
    Case Laws Income Tax
    Section 153A and Income Tax Assessments Post Search and Seizure Operations: Exploring the Role of In...
    Case Laws Income Tax
    Analysis of Judicial Approach in Tax Evasion through Accommodation Entries: A Case Study
    Case Laws Income Tax
    The Taxation of Cooperative Societies: A Legal Analysis of Deduction Eligibility U/s 80P
    Case Laws Income Tax
    Analyzing Section 43B's Application in Service Tax Liabilities: A Legal Perspective.
    Case Laws Income Tax
    Assessing the Enforceability of Section 148 Notices Post-Assessee's Demise: Legal Heirs and Income T...
    Case Laws Income Tax
    Analyzing the Threshold for Criminal Prosecution in Cases of Non-Compliance with Income Tax Laws
    Case Laws Income Tax
    Timeliness and Validity of Charitable Trust Registrations under Section 80G: A Legal Examination
❮
❯
❯❯
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
Case Laws Income Tax
Show AI Summary
Residential status determination can shift tax assessment jurisdiction when overseas activities do not qualify as employment.
The Tribunal examined whether the appellant's overseas activities constituted employment for residential-status purposes, applying ejusdem generis and noscitur a sociis to conclude they did not. Consequently, the officer of international taxation's assumption of jurisdiction based on non resident status was improper once residential status was contested; the file should have been transferred to the territorially competent assessing officer or an authorised officer. An assessment conducted without such lawful jurisdiction was characterised as legally defective and without effect.
Case Laws Income Tax
Show AI Summary
Genuineness of gifts requires proof of donor identity and capacity, otherwise taxability follows under assessment rules.
The High Court examined taxation of receipts treated as gifts, stressing that the assessee must prove the genuineness of gifts by establishing donor identity and the donors' capacity and creditworthiness; acceptance by lower authorities does not relieve the recipient of the burden of proof, and inadequate documentary corroboration justifies reassessment where donations are doubtful.
Case Laws Income Tax
Show AI Summary
Advance rent characterization alters TDS obligations under Section 194-I, requiring payers to deduct tax at source.
Payments labelled as a security deposit that are contractually reduced and adjusted against periodic rent payments are treated as advance rent rather than refundable security, and thus constitute rent for TDS purposes, obliging the payer to deduct tax at source under the statutory withholding framework.
Case Laws Income Tax
Show AI Summary
Draft assessment procedure required under law: omission invalidates assessment proceedings and denies assessee DRP objection rights.
Section 144C mandates a non-obstante, mandatory draft assessment procedure for eligible assessees, requiring issuance of a draft order, opportunity to file objections, and consideration by a three-member Dispute Resolution Panel. A foreign entity qualifying as an eligible assessee must be afforded this process; failure to issue the draft order is a substantive lapse that deprives the assessee of the DRP forum and engenders jurisdictional infirmity in any consequent final assessment, demand, or penalty. Revisionary powers do not obviate the Section 144C mandate.
Case Laws Income Tax
Show AI Summary
DTAA incorporation: notification requirement under domestic law limits automatic treaty application across countries and clarifies temporal scope.
The decision holds that a DTAA requires a mandatory notification under Section 90(1) to be effective domestically, that provisions in a DTAA with one country do not automatically extend to other bilateral agreements without explicit amendment, and that the present-tense term "is" fixes the temporal application of treaty benefits to the date of treaty entry with India.
Case Laws Income Tax
Show AI Summary
Most favoured nation clause interpretation guides treaty effect, subject to domestic notification requirements for implementation.
The Most Favoured Nation (MFN) clause in tax treaties must be interpreted under Article 31 VCLT principles as reflecting customary international law, with subsequent agreements and state practice serving as authentic means of interpretation. Domestic implementation procedures materially affect treaty operation: comparative practices of other states cannot substitute for India's requirement of formal domestic steps, including issuance of a notification after a treaty trigger event, to assimilate treaty amendments into national law.
Case Laws Income Tax
Show AI Summary
Treaty implementation procedures determine when DTAA modifications bind taxpayers, requiring domestic notification for enforceability.
In India, DTAA modifications take effect only upon formal domestic notification, preventing automatic retroactive application of third country treaty changes and reflecting a dualist approach requiring assimilation of treaty amendments into domestic law before they bind taxpayers; by contrast, the Netherlands, France, and Switzerland rely on differing domestic mechanisms-executive decrees, parliamentary ratification, or referenda and implementing orders-that may permit retroactive application and integrate treaties into domestic enforceable law.
Case Laws Income Tax
Show AI Summary
Interpretation of "is" in tax treaties determines when OECD membership triggers treaty benefits under domestic implementation rules.
Interpretation of the term "is" in DTAAs is context-dependent: although generally present in signification, its temporal application must be determined from the treaty text and purpose. Applied to OECD membership, the operative moment for eligibility to treaty benefits depends on when the DTAA relationship produces the relevant legal consequence, and this assessment must be reconciled with the domestic requirement for legislative action or notification for treaty enforceability.
Case Laws Income Tax
Show AI Summary
Treaty Enforcement: legislative enactment required for treaties to create domestic rights; executive negotiation alone is insufficient.
Treaties do not function as self-executing domestic law; the Union may negotiate and ratify international agreements but legislative enactment is required to create or alter domestic rights and obligations. Under the dualist approach, executive negotiation and foreign measures cannot substitute for domestic incorporation; implementing statutes and notification mechanisms are necessary for tax treaties to be recognized and applied by revenue authorities. Courts may consult treaty texts to resolve ambiguities in domestic implementing laws but cannot themselves import treaty provisions into domestic law absent parliamentary enactment.
Case Laws Income Tax
Show AI Summary
Jurisdictional validity of Section 143(2) notices: invalid issuance by wrong officer vitiates ensuing scrutiny proceedings.
The tribunal found that a statutory scrutiny notice issued by an officer without jurisdiction at the time of issuance was defective, and that subsequent action by another assessing officer did not cure the initial defect; jurisdictional allocation must follow administrative monetary thresholds for metropolitan corporate returns, and failure to issue a valid notice at initiation vitiates scrutiny proceedings.
Case Laws Income Tax
Show AI Summary
Unexplained cash deposits: prospective application of higher tax rate under Section 115BBE clarified for post-amendment assessments.
The assessing process treated certain cash receipts as unexplained under Section 69A read with the higher-rate taxation provision, but acceptance of an opening cash balance and maintenance of a cash book reduced the addition; contemporaneous records are decisive. The amendment imposing a special flat tax rate on unexplained income applies prospectively and does not operate retrospectively, so its applicability depends on the assessment year.
Case Laws Income Tax
Show AI Summary
Jurisdictional transfer under Section 127 can reassign assessments within the same city without prior hearing, as an administrative measure.
Jurisdictional transfer under Section 127 empowers senior tax officials to reassign cases for administrative convenience, generally requiring reasons and an opportunity to be heard; however, transfers within the same city do not require prior hearing. The tribunal found a valid transfer order centralising the matter within the same city, held the absence of prior hearing immaterial under the intra-city exception, and concluded the administrative transfer did not prejudice the assessee or invalidate the assessment.
Case Laws Income Tax
Show AI Summary
Notional rental income: ownership can trigger annual value assessment with standard deduction; vacancy allowance restricted when not let.
Ownership alone can give rise to taxable annual value by way of notional rental income, with annual value for unlet properties determined by reference to expected rent and, where applicable, by a proportionate measure of property cost. From that annual value the statutory 30% standard deduction and interest on borrowed capital are deductible. Vacancy allowance is not treated as available where properties remain unlet for the entire year, and balance-sheet disclosure of property ownership can support assessment.
Case Laws Income Tax
Show AI Summary
Incriminating material discovered during search permits reassessment under Section 153A, validating additional income adjustments by tax authorities.
The Tribunal applied the principle that discovery of previously undisclosed documents during a search can constitute incriminating material, thereby activating Section 153A jurisdiction to reassess income for multiple prior years. It found an undisclosed balance sheet showing ownership of properties as incriminating, and addressed related challenges - estimation of house property income, jurisdictional objections, notice deficiencies, interest levies, and natural justice claims - against the backdrop of valid reassessment under the search-linked provision.
Case Laws Income Tax
Show AI Summary
Genuineness of transactions: accommodation entries and circumstantial evidence can defeat claimed tax exemptions without commercial substance.
Denial of exemption under Section 10(38) is justified where claims rest on paper companies and accommodation entry providers; synchronized trading, SEBI identified price rigging, and weak connection between claimants and transactions diminish the probative value of demat statements and share certificates. The legal focus is on the onus of proof, application of the preponderance of probabilities and circumstantial inferences, requiring the assessee to establish commercial substance for unsecured loans and claimed trades rather than rely solely on documentation.
Case Laws Income Tax
Show AI Summary
Deduction under Section 80P for cooperative societies hinges on mutuality and classification as cooperative banks.
Deduction eligibility under Section 80P depends on the principle of mutuality and on whether receipts involve entities that qualify as banking companies; interest income meeting mutuality criteria may be deductible for cooperative societies, whereas interest arising from dealings with entities classifiable as banks should be treated as income from other sources. The tribunal required verification of claims and reclassification of such interest where applicable.
Case Laws Income Tax
Show AI Summary
Section 43B payment rule prevents deduction for unpaid service tax, altering taxable income and accounting timing.
Section 43B's payment-based rule makes deductions allowable only on actual payment; applied to service tax, unpaid service tax not remitted before the return filing due date is disallowable and may be treated as part of assessee's income, despite not being charged to profit and loss. Under mercantile accounting service tax received must be included in turnover, and legislative changes to payment schedules affect compliance timing; precedents reinforce that non-payment precludes deduction under the non-absentee payment requirement of Section 43B.
Case Laws Income Tax
Show AI Summary
Validity of reassessment notices to deceased assessees hinges on proper service to legal heirs, else jurisdiction is lacking.
The core legal rule is that reassessment notices must be served on a living person or the legal heir; issuance to a deceased individual vitiates jurisdiction. Service on the correct person is a condition precedent to reassessment, and legal heirs have no statutory duty to inform authorities of death. Legal representative liability arises only where proceedings began during the assessee's lifetime and may be continued against successors. Courts may restrain actions taken without jurisdiction while statutory remedies remain available.
Case Laws Income Tax
Show AI Summary
Failure to file tax returns within the prescribed time can sustain criminal prosecution despite later accepted belated returns.
The dispute focuses on prosecution under Section 276CC for failure to file returns within the prescribed time, where acceptance of a belated return and dismissal of penalty proceedings do not necessarily negate the presumption of mens rea; the accused bears the burden to rebut intentional concealment, and evidential material from searches indicating undisclosed transactions can sustain criminal proceedings.
Case Laws Income Tax
Show AI Summary
Timeliness of Section 80G applications: application treated as timely and statutory reconsideration directed under purposive interpretation.
Timeliness of registration under Section 80G was examined with focus on statutory deadlines, the effect of provisional approval under Section 80G(5), and amendments impacting trusts that commenced activities before formal registration; interpretation emphasised purposive and harmonious construction, legislative intent, natural justice in notice and hearing, and directed reconsideration of eligibility with opportunity to submit documents.

TMI Notes

Back

All TMI Notes

Showing Results for :
Reset Filters
No Records Found

TMI Notes

Back

All TMI Notes

Comparison of Section 209 "Tax on income from bonds or Global Depository Receipts 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 209 Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer.

Income-tax Act, 2025

At a Glance

These documents reproduce Clause 209 of the Income Tax Bill, 2025 (Old Version) and Section 209 of the Income-tax Act, 2025 as enacted. Both provisions impose special tax treatment for non-residents on income from certain bonds and Global Depository Receipts (GDRs) purchased in foreign currency and on capital gains arising on their transfer. The changes between the Bill and the enacted Section are primarily textual, reference-based and procedural in nature; they affect computation wording, cross-references to other sections, and a minor definitional cross-reference. Affected parties: non-resident investors, financial intermediaries (approved intermediaries), Indian issuing companies and tax administration. Effective date or enactment date: Not stated in the document.

Background & Scope

Statutory hook: Clause/Section 209, appearing in the Income Tax Bill, 2025 (old version) and in the Income-tax Act, 2025 respectively. The provision is located within the special provisions relating to non-residents and foreign companies. The text covers income from (i) interest on specified bonds issued by Indian companies or public sector companies and purchased in foreign currency; (ii) dividends on Global Depository Receipts acquired in foreign currency through an approved intermediary; and (iii) long-term capital gains on transfer of those bonds or GDRs. The enacted section also contains procedural provisions governing deductions, returns, and certain transitional/amalgamation situations. Definitions provided in the enacted section include 'approved intermediary' (as per a Central Government-notified scheme) and a cross-reference defining 'Global Depository Receipts' (section 193(4)(a) in the Act). The Bill version contains similar material but uses a different cross-reference for GDRs (section 190(4)(a)).

Statutory Provision Mode

Text & Scope

The provision applies to an assessee who is a non-resident and whose total income includes any of the incomes specified in the statutory Table. The Table enumerates four entries:

  • Interest on (a) bonds of an Indian company issued under a Central Government notified scheme, or (b) bonds of a public sector company sold by the Government, when purchased in foreign currency - taxed at 10%.
  • Dividends on Global Depository Receipts - where the GDRs are issued/re-issued under notified schemes and purchased in foreign currency through an approved intermediary - taxed at 10%.
  • Long-term capital gains on transfer of the bonds or GDRs referred to above - taxed at 12.5%.
  • The remainder: total income as reduced by the incomes in items 1-3 - in the enacted section described as "Rates in force"; in the Bill as "Income-tax chargeable on such income."

Interpretation

The enacted text frames the tax liability of a non-resident as "the aggregate of income-tax computed at the rate specified in column C applied on the corresponding income specified in column B." This language emphasises a rate-applied computation for each head listed. The Bill phrasing (aggregate of the amounts mentioned in column C) is functionally similar but less explicit about the computation methodology. The enacted provision also expressly excludes application of section 72(6) for computation of long-term capital gains on these specified assets.

Exceptions/Provisos

Several limiting or procedural provisions are present:

  • Where a non-resident's gross total income consists only of interest and/or dividends as specified (items 1 and 2), no deductions are allowed under enumerated provisions (enacted section cites sections 28 to 58, 60 and 61; Bill cited sections 26 to 61).
  • Where the gross total income includes any of items 1-3, the gross total income is to be reduced by such income and deductions under Chapter VIII are to be allowed as if the reduced gross total income were the gross total income of the assessee.
  • A non-resident need not furnish a return u/s 263(1) if total income in the year consisted only of the interest/dividend incomes in items 1-2 and tax was deducted at source under Chapter XIX-B.
  • Transitional/amalgamation rule: where GDRs or bonds are acquired by an assessee in an amalgamated or resulting company by virtue of holding such instruments in the amalgamating or demerged company, the same provisions apply to such GDRs or bonds.

Illustrations

  • Example 1: A non-resident holds interest-bearing bonds of an Indian company purchased in foreign currency and receives interest of X in the year. The interest is taxed at 10% under item 1. Not stated in the document whether grossing up, surcharges or cesses apply beyond the stated rate.
  • Example 2: A non-resident sells long-term GDRs (acquired in foreign currency through an approved intermediary) and realises capital gain Y. The long-term capital gain is taxed at 12.5% as per item 3. Not stated in the document whether indexation or specific computation method for capital gain is modified beyond the exclusion of section 72(6).

Interplay

The enacted section cross-references other statutory provisions: Chapters and sections governing deductions (Sections 28-58, 60, 61), Chapter VIII deductions, section 72(6) (specifically excluded), the return filing provision referenced (section 263(1) in the texts), Chapter XIX-B (TDS provisions) and the definition of GDRs (section 193(4)(a) in the Act text; Bill referenced section 190(4)(a)). The documents do not reproduce the content of those cross-referenced provisions; therefore detailed interaction mechanics are Not stated in the document.

Differences between the Clause 209 of the Income Tax Bill, 2025 (Old Version) and Section 209 of the Income-tax Act, 2025

Topic Bill (Clause 209 Old Version) Enacted Section 209 Practical impact
Computation wording "aggregate of the amounts mentioned in column C thereof." "aggregate of income-tax computed at the rate specified in the column C applied on the corresponding income specified in column B." clearer computational method in the enacted text ensuring rates are applied to corresponding income heads rather than potentially interpreted as flat sums.
Residual income wording (Table item 4) "Income-tax chargeable on such income." "Rates in force." enacted text signals application of prevailing tax rates to the residual income; the Bill phrase might have invited alternative interpretations of chargeability. Exact fiscal consequences Not stated in the document.
Cross-references to deduction sections Excludes deductions u/ss 26 to 61 (and certain sub-clauses) and under Chapter VIII. Excludes deductions u/ss 28 to 58, 60 and 61 (and certain sub-clauses) and under Chapter VIII. the enacted text alters the catalogue of excluded deduction sections; which specific deductions are affected is Not stated in the document.
Definition cross-reference for "Global Depository Receipts" Cross-refers to section 190(4)(a). Cross-refers to section 193(4)(a). depends on the substantive definitions in those sections-Not stated in the document.
Minor drafting/typo corrections Contains editorial notes/corrections in the Bill (e.g., "as per with" corrected to "as per"). Polished enacted language ("as may be notified by the Central Government"). reduces ambiguity; no substantive policy change apparent from document.

Practical Implications

  • Compliance and risk areas: Non-resident taxpayers receiving the enumerated incomes must ensure correct application of the specified rates (10% for interest/dividend; 12.5% for long-term capital gains) and must verify whether their gross total income consists solely of those heads to determine deductibility limits and return filing obligations. The enacted text's explicit computation language reduces ambiguity when computing aggregate tax on the heads in the Table.
  • Record-keeping/evidence points: The provision emphasises acquisition "in foreign currency" and purchase "through an approved intermediary" for GDRs; therefore investors and intermediaries should retain evidence of currency of purchase and intermediary approval status under a Central Government-notified scheme. Not stated in the document are the particulars of the scheme or the certification/documentation required by the approved intermediary; those details are Not stated in the document.

Key Takeaways

  • Both texts impose special fixed rates for non-residents on interest (10%), dividends on GDRs (10%) and long-term capital gains on transfer of such assets (12.5%).
  • The enacted section clarifies computation language - "income-tax computed at the rate specified" - whereas the Bill used a less explicit phrase "aggregate of the amounts mentioned". Practical effect: clearer computational instruction in the enacted text.
  • Cross-reference differences: enacted section cites deduction sections as 28-58, 60 and 61; the Bill cited 26-61. This narrows the list of excluded deductions in the enacted text relative to the Bill; practical impact depends on which specific provisions were moved/excluded (details Not stated in the document).
  • The enacted section uses a different cross-reference for the statutory definition of "Global Depository Receipts" (section 193(4)(a)) versus the Bill's section 190(4)(a). The practical significance depends on the definitions in those sections (Not stated in the document).
  • The enacted provision replaces the Bill's phrase "Income-tax chargeable on such income" for the residual income with "Rates in force", which suggests that the balance of income will be taxed under prevailing rates rather than by reference to a specific computation language in the Table. The exact fiscal effect is Not stated in the document.
  • Procedural provisions on returns and applicability on amalgamation are retained in substance; they require documentary corroboration for threshold compliance (Not stated in the document as to the precise documentary standards).

Full Text:

Section 209 Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer.

Topics

Acts Income Tax