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
    Suppose Mr. has paid premium of 25,000 for policy A taken on 30th June 2011 (sum assured 2,00,000) a...
    Manuals Income Tax
    I and my wife both paid for education of our one child. My wife paid 70,000 and I paid 1,60,000 can ...
    Manuals Income Tax
    Can I claim deduction u/s 80C of Income tax Act, 1961 for my adopted child’s school fees?
    Manuals Income Tax
    What are the inclusions and exclusions in Tuition Fees?
    Manuals Income Tax
    Example illustrating the Rule of Residence for an Individual for the Assessment year 2015-16
    Manuals Income Tax
    Example:-During the previous year ending 31st March, 2013, X, a salaried employee received ₹ 1...
    Manuals Income Tax
    Example:-The employer sells the following assets to the employees on 1st January 2015. Car to Z for...
    Manuals Income Tax
    Example:-. On 15th October 2014, the company gives its music system to Y for domestic use. Ownershi...
    Manuals Income Tax
    Example:-X owns car (1400cc). He uses it partly for official purposes and partly for private purpose...
    Manuals Income Tax
    Example:-X is employed by a company. He has been provided a car (1200cc) owned by employer, cost of ...
    Manuals Income Tax
    Example:- X, a director-employee of a private sector company based at Indore (population: 24Lakhs),...
    Manuals Income Tax
    Example:-X, an employee of ABC Ltd., posted at Ajmer (population: 18 Lakh), draws ₹ 3,00,000 a...
    Manuals Income Tax
    Example:-X has received following amount during the previous year. Basic Salary 7,000 p.m.; Dearness...
    Manuals Income Tax
    Example:-Mr. X received voluntary retirement compensation of ₹ 7,00,000 after 30 years 4 month...
    Manuals Income Tax
    Example:-Mr. X received retrenchment compensation of ₹ 10,00,000 after 30 years 4 months of se...
    Manuals Income Tax
    Example:-Mr. X retired from ABC Ltd. on 11th March 2014 after serving for 30 years and 11 months and...
    Manuals Income Tax
    Example:-X retires from B Ltd. on 31st July, 2014. He gets pension of ₹ 1,000 per month up to ...
    Manuals Income Tax
    Example:-An employee of X Ltd. retires on 10th March, 2015 after service of 26 years and receives &#...
    Manuals Income Tax
    Example:-X, an employee of A Ltd., receives ₹ 62,000 as gratuity (he is covered under the Paym...
    Manuals Income Tax
    Example:- X, an employee of Central Govt., receives 9,20,000 as gratuity at the time of his retirem...
❮
❯
❯❯
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
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.
Manuals Income Tax
Show AI Summary
Deduction under 80C: spouses can separately claim education-related deductions based on their individual contributions and limits.
Spouses who each make genuine payments toward a child's education may separately claim a deduction under deduction u/s 80C based on their respective contributions, with each spouse's claim limited by the statutory individual ceiling; the wife may claim her actual payment and the husband may claim up to the maximum permissible individual deduction.
Manuals Income Tax
Show AI Summary
Deduction under section 80C for adopted child's school fees permitted where the statute is silent on biological status.
Because 80C does not specify that the child must be biological, deductions for school fees paid for an adopted child are treated as permissible under the provision; the operative legal point is the statute's silence regarding the child's biological status.
Manuals Income Tax
Show AI Summary
Tuition fee deduction under 80C covers institutional tuition but excludes transport, hostel, library and private tuition charges.
Deduction under Section 80C allows tuition fee claims only for amounts paid to recognised educational institutions, including pre nursery, play school and nursery class fees; excluded are transport, hostel, mess, library and vehicle stand charges, late fees, part time and distance learning course fees, and private tuition.
Manuals Income Tax
Show AI Summary
Residence test for individuals sets presence and prior year stay thresholds determining resident status for income tax assessment.
Rule of residence for individuals for the assessment year 2015-16 uses presence-based thresholds and cumulative prior year conditions to determine resident in India status. Individuals are classified by category-those leaving for employment, visitors who are citizens or persons of Indian origin, and all other individuals-with each category subject to the single year presence test and, where applicable, an additional short term presence requirement plus multi year aggregation criteria assessing residence across preceding years.
Manuals Income Tax
Show AI Summary
Relief under Section 89(1): compare tax on receipt and accrual bases to determine relief for salary arrears and adjust current tax payable.
Relief for salary received in arrears or advance is determined by computing tax on the aggregate income on the receipt basis and comparing it with tax computed as if the income had been charged to the earlier year(s); the relief equals the difference. The example aggregates salary and arrears, applies standard and specified deductions, computes net income and tax for the years on receipt and accrual bases, and derives the relief amount which is then deducted from current year tax payable.
Manuals Income Tax
Show AI Summary
Perquisite valuation: employer sale of movable assets to employees taxed as written down value less sale consideration.
Taxable perquisite on employer sale of movable assets to employees is the difference between the employer's written down value (after applying depreciation to cost to reach the balance on the relevant date) and the sale consideration; the document demonstrates this by computing successive depreciated written down values for a car, computer and fridge and subtracting the sale prices to determine the perquisite amounts.
Manuals Income Tax
Show AI Summary
Use of movable assets perquisite taxed at prescribed annual percentage with pro rata computation for period of employer-provided use.
Use of moveable assets provided by an employer is a taxable perquisite valued by applying a prescribed annual percentage of the asset's cost, with a pro rata adjustment for the actual days of employee use within the year (annual percentage of cost x days of use/365).
Manuals Income Tax
Show AI Summary
Perquisite valuation for motor car under Rule 3(2): employer reimbursements reduced by official-use deduction, affecting taxable perquisite.
Valuation of a motor car perquisite requires deducting the official-use portion from employer reimbursements before treating the balance as a taxable perquisite; absent a log book a fixed deduction method is applied, while contemporaneous usage evidence permits apportionment of the reimbursement by the documented official-use percentage.
Manuals Income Tax
Show AI Summary
Perquisite valuation of employer provided motor car treats engine capacity, driver cost, recoveries and private use depreciation.
Perquisite valuation for employer provided motor cars uses a fixed monthly valuation for car and driver where engine capacity falls below the higher threshold; recoveries from the employee do not reduce that fixed valuation. If the vehicle is used exclusively for private purposes, the taxable perquisite is calculated as annual depreciation plus petrol, driver and maintenance costs, minus any amount recovered from the employee.
Manuals Income Tax
Show AI Summary
Rent-free accommodation valuation: taxable value is the lower of a percentage of salary or employer-paid rent for perquisite computation.
Taxable value of a rent-free accommodation perquisite is the lower of (a) 15% of salary (computed as basic salary plus DA plus commission) and (b) employer paid annual rent. In the example the aggregated annual basic, DA and commission are used to calculate the 15% benchmark, which is then compared with the annual lease rent to determine the taxable perquisite.
Manuals Income Tax
Show AI Summary
Taxable value of rent-free accommodation set at a percentage of salary when city population exceeds threshold.
Taxable perquisite for rent free accommodation is computed by applying the population based percentage to Salary, defined to include Basic, DA (forming part of salary) and Commission; the taxable value equals the prescribed percentage of that aggregated salary.
Manuals Income Tax
Show AI Summary
House Rent Allowance exemption under section 10(13A) requires choosing the minimum of three salary-based tests to determine taxable HRA.
The exemption under section 10(13A) and Rule 2A is the minimum of actual HRA received, rent paid in excess of ten percent of salary, and the prescribed percentage of salary. In the example actual HRA is 36,000; excess rent over ten percent of salary is 26,400; forty percent of salary is 38,400. The exempt amount is therefore 26,400 and the remaining 9,600 is included in gross salary.
Manuals Income Tax
Show AI Summary
Voluntary retirement compensation tax treatment: exemption limited by statutory ceiling formulas; excess is treated as taxable salary.
Computation of taxability of voluntary retirement compensation is governed by a statutory exemption limited by prescribed ceiling formulas and the principle that the exempt amount is the lesser of specified sums. In the example, compensation received of 700,000 gives an exempt amount of 500,000 under the statutory ceiling, leaving 200,000 as taxable salary under the governing exemption provision and associated rules.
Manuals Income Tax
Show AI Summary
Retrenchment compensation exemption under Sec. 10(10B): apply least-of-three test for calculating taxable retrenchment; excess taxable.
Computation of retrenchment compensation exemption under Sec. 10(10B): compute the three comparator sums using the employee's service length and salary components, take the least of those sums as exempt. In the example the exempt amount is Rs. 4,32,692 and the remaining Rs. 5,67,308 of the retrenchment payment is taxable.
Manuals Income Tax
Show AI Summary
Leave salary exemption under section 10(10AA) limited by average salary and statutory caps, yielding the lowest applicable ceiling.
Computation of leave salary exemption under section 10(10AA) requires determining average salary by annualising ten months' basic pay plus the proportion of dearness allowance included for retirement benefits and dividing by ten. Unavailed leave months equal total entitlement minus leaves taken and leaves earlier encashed. The exempt leave salary is the least of (unavailed months x average salary), (ten months' average salary), and the statutory ceilings; the example selects the lowest applicable ceiling as exempt.
Manuals Income Tax
Show AI Summary
Commuted pension tax treatment: part exempt, part taxable; exemption reduced where gratuity is received.
Uncommuted pension is fully taxable as salary; commuted pension is partly exempt and partly taxable. Compute a notional full pension value from the commuted payment and apply an exemption fraction: if no gratuity is received, one half of the notional full pension value is exempt; if gratuity is received, one third is exempt. The remainder of the commuted payment is chargeable to tax as salary and must be added to taxable uncommuted pension to determine total taxable pension income.
Manuals Income Tax
Show AI Summary
Gratuity exemption: least of three test determines exempt portion for noncovered employers; excess gratuity is taxable.
Gratuity from a noncovered employer is exempt to the extent of the least of three amounts: the service based fraction computed from the average monthly salary (which includes basic pay, one month's dearness allowance, and average monthly commission), the statutory monetary ceiling, and the gratuity actually received; any excess over that exempt amount is taxable.
Manuals Income Tax
Show AI Summary
Gratuity exemption: part determined by 15 days salary times completed years, excess treated as taxable salary.
Gratuity exemption is determined by taking the least of: the product of 15 days' salary and completed years of service, the statutory ceiling, and the gratuity received. Completed years may be rounded to include qualifying months. The exempt portion is that least amount; any excess over the exempt amount is taxable as salary income in the assessment year.
Manuals Income Tax
Show AI Summary
Gratuity exemption under Section 10(10)(i) remains available even if retiree accepts private sector employment after retirement.
Gratuity paid to a government employee on retirement is fully exempt from income tax under the governing gratuity exemption provision, and that exemption remains available even if the retiree subsequently accepts employment in the private sector.

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