Just a moment...

⚠✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Keyword Search :
AI Tools : New
Ask tax questions in natural language. Powered by AI trained on the TaxTMI legal database. Use AI Tools ➞
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
  6. The system will try to fetch results that contains ALL your words.
  7. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
    8. 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
    ManualsIncome Tax
    Whether an amount received by an Individual (a co-parcener to the HUF) from this HUF would be taxabl...
    ManualsIncome Tax
    Change in accounting policy - When is to be changed - What should be the basis for change in account...
    ManualsIncome Tax
    Accrual of income - Scope of ICDS - If there is conflict between Section 5 and Section 145, which wo...
    ManualsIncome Tax
    ICDS - Accrual basis of Accounting - Accrual of income versus Receipt of income
    ManualsIncome Tax
    Bad debts out of income recognised on the basis of ICDS but not yet recognised in books of account
    ManualsIncome Tax
    Applicability of ICDS for the purpose of disallowance u/s 40(a)(i) and 40(a)(ia)
    ManualsIncome Tax
    Applicability of ICDS on TDS
    ManualsIncome Tax
    Maintenance of Books of accounts for the purpose of ICDS
    NotificationsGST
    Levy of GST - Reverse Charge on Legal Services - Services provided by an individual advocate includi...
    Case LawsVAT / Sales Tax
    Reversal of Input Tax Credit - In GST / VAT era, emergence of by-product which is exempt during manu...
    Case LawsIncome Tax
    Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassm...
    ManualsIncome Tax
    Whether it is required to disclose a change in the accounting policies if it has no material effect ...
    ManualsIncome Tax
    ICDS-I provides that an accounting policy shall not be changed without ’reasonable cause’. The t...
    ManualsIncome Tax
    Why does the marked to market loss or an expected loss shall not be recognised as per ICDS-I.
    ManualsIncome Tax
    When does an assessee is required to make disclosures of fundamental accounting assumptions as per I...
    ManualsIncome Tax
    What is the scope of Going Concern as per ICDS I.
    ManualsIncome Tax
    ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific discl...
    ManualsIncome Tax
    In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, wh...
    ManualsIncome Tax
    Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation a...
    ManualsIncome Tax
    When can a provision be recognized as per ICDS X.
❮
❯
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

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

    NOTE:

    Open Link
    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    ManualsIncome Tax
    Whether an amount received by an Individual (a co-parcener to the HUF) from this HUF would be taxabl...
    Show AI Summary
    Exemption for HUF distributions may not apply where clubbing rules apply, affecting taxability of co parcener receipts.
    Amounts received by an individual co parcener from the HUF are exempt in the hands of the assessee under the general exemption for such receipts, subject to the overriding provision dealing with clubbing or attribution of income which can limit that exemption.
    ManualsIncome Tax
    Change in accounting policy - When is to be changed - What should be the basis for change in account...
    Show AI Summary
    Accounting policy change requires reasonable cause and substance-over-form treatment to reflect a true and fair view.
    Accounting policies must present a true and fair view of the state of affairs and income; treatment and presentation must follow substance over legal form; an accounting policy shall not be changed without reasonable cause, and any change must serve faithful representation for income computation and disclosure.
    ManualsIncome Tax
    Accrual of income - Scope of ICDS - If there is conflict between Section 5 and Section 145, which wo...
    Show AI Summary
    Accrual versus accounting method: accrual-based charge under residency provisions overrides cash-basis bookkeeping for taxing income.
    Where income has become taxable under the substantive provision governing non-resident receipts, that charging provision prevails over a taxpayer's cash-basis accounting; Section 145 is a machinery provision to effectuate the charge and cannot be used to defeat or nullify the substantive charge so as to allow taxable income to escape tax.
    ManualsIncome Tax
    ICDS - Accrual basis of Accounting - Accrual of income versus Receipt of income
    Show AI Summary
    Accrual of income: recognition occurs when a vested right and debtor liability arise, not necessarily on actual receipt.
    ICDS I explains that accrual of income arises when a vested right to receive payment emerges and a corresponding liability is created on the other party; postponement or non-receipt does not prevent accrual, though non-receipt may justify separate deductions or claims. Accrual and arisal denote an inchoate right prior to actual receipt, while receipt denotes physical collection, and for tax accounting the existence of the right and the debtor's liability are the operative tests for accrual-based recognition.
    ManualsIncome Tax
    Bad debts out of income recognised on the basis of ICDS but not yet recognised in books of account
    Show AI Summary
    Deduction for bad debts allowed where income recognised under ICDS but not recorded in accounts is later irrecoverable.
    Where a debt included in income on the basis of Income Computation and Disclosure Standards but not recorded in the accounts becomes irrecoverable, Finance Act, 2016 permits the debt (or part) to be allowed as a deduction in the year it becomes irrecoverable and deems that the debt has been written off in the accounts for the purposes of the deduction.
    ManualsIncome Tax
    Applicability of ICDS for the purpose of disallowance u/s 40(a)(i) and 40(a)(ia)
    Show AI Summary
    Applicability of ICDS: timing of TDS entries determines whether expenditure is disallowable under TDS disallowance provisions.
    ICDS apply only to computation of income under Profit & gains from business or profession and Income from Other Sources. For Sections 40(a)(i) and 40(a)(ia), disallowance depends on whether tax was deductible and whether an entry creating that liability or deduction existed in the year expenditure was claimed; absence of such an entry negates disallowance, while prior-year deduction of tax prevents disallowance in the year of allowance.
    ManualsIncome Tax
    Applicability of ICDS on TDS
    Show AI Summary
    ICDS exclusion from TDS timing: TDS deduction timing and taxable expenditure follow book credit or payment date.
    ICDS does not affect TDS mechanics: the time for TDS (date of credit in books or date of payment) and the expenditure amount subject to deduction are determined by the books of account or payment date, not by ICDS computation of allowable expenditure.
    ManualsIncome Tax
    Maintenance of Books of accounts for the purpose of ICDS
    Show AI Summary
    ICDS compliance: prepare ICDS-based financials and reconciliations to ensure taxable income computation aligns with disclosure standards.
    Differences between accounting under ICDS and other accounting frameworks can materially affect taxable income and subsequent years' computations; taxpayers should quantify divergences and account for consequential tax adjustments. Practically, maintain parallel ICDS-based profit and loss and balance sheet statements and prepare a detailed reconciliation with primary accounting records to ensure all ICDS adjustments are considered. Auditors must certify that computation of total income complies with ICDS, making transparent documentation of adjustments and reconciliations necessary for audit certification and tax compliance.
    NotificationsGST
    Levy of GST - Reverse Charge on Legal Services - Services provided by an individual advocate includi...
    Show AI Summary
    Reverse charge on legal services broadened to include advisory and representational work under GST notifications.
    Corrigenda amend reverse-charge entries to treat "services provided by an individual advocate including a senior advocate or firm of advocates by way of legal services, directly or indirectly," as taxable, and add an Explanation that "legal service" includes advice, consultancy, assistance in any branch of law and representational services, thereby broadening the scope beyond representational services before courts, tribunals or authorities.
    Case LawsVAT / Sales Tax
    Reversal of Input Tax Credit - In GST / VAT era, emergence of by-product which is exempt during manu...
    Show AI Summary
    Reversal of input tax credit: sale of exempt by products triggers reversal under VAT/GST credit rules.
    Reversal of input tax credit is triggered by the sale of goods produced incidentally during manufacture, not by their status as by products. The statutory credit regime aims to prevent double taxation by granting input credit for inputs used in manufacture, but the legislature determines the extent and conditions of credit. A provision that uses the terms 'goods' and 'sale' does not distinguish by products from final products, so where the incidental output is marketable and sold for consideration, reversal rules apply.
    Case LawsIncome Tax
    Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassm...
    Show AI Summary
    Capital gain valuation under section 50C on transfer of contractual rights challenged as inappropriate and commercially onerous.
    Application of section 50C to a transfer of rights under a power of attorney, where no possession or control of the immovable property passed and no stamp authority value was adopted, was contested; the assessing officer's adoption of an enhanced valuation for computing short term capital gains was regarded as inappropriate and characterised as harassment, and that addition was reversed on appeal.
    ManualsIncome Tax
    Whether it is required to disclose a change in the accounting policies if it has no material effect ...
    Show AI Summary
    Accounting policy change disclosure required when future material effect is expected; disclose at adoption and when it first becomes material.
    Change in accounting policies that has no material effect in the current previous year but is reasonably expected to have material effect later must be disclosed: (a) in the previous year in which the change is adopted; and (b) in the previous year in which the change has material effect for the first time.
    ManualsIncome Tax
    ICDS-I provides that an accounting policy shall not be changed without ’reasonable cause’. The t...
    Show AI Summary
    Change in accounting policy: permitted only for reasonable cause and where AS 5 requires it or improves financial presentation.
    A change in accounting policy will be treated as reasonable if it meets the criterion established by AS 5: the change is permissible only where it is required by statute, necessary for compliance with an accounting standard, or results in a more appropriate presentation of the enterprise's financial statements.
    ManualsIncome Tax
    Why does the marked to market loss or an expected loss shall not be recognised as per ICDS-I.
    Show AI Summary
    Mark-to-market loss recognition barred under ICDS, allowed only if another ICDS or tax law permits.
    Mark-to-market and expected losses are not recognised under ICDS I unless another ICDS permits such recognition; the Accounting Standards Committee held that because anticipated profits are not recognised, parity requires that expected or mark-to-market losses also be excluded, while established tax-law precedent allows deduction for exchange fluctuation losses arising on revenue-purpose borrowings.
    ManualsIncome Tax
    When does an assessee is required to make disclosures of fundamental accounting assumptions as per I...
    Show AI Summary
    Disclosure of fundamental accounting assumptions required when Going Concern, Consistency or Accrual are not followed in tax reporting.
    ICDS I requires that where the Going Concern, Consistency and Accrual assumptions are followed no specific disclosure is required, but any departure from these fundamental accounting assumptions must be disclosed; the revised tax audit reporting format provides columns to record such disclosures.
    ManualsIncome Tax
    What is the scope of Going Concern as per ICDS I.
    Show AI Summary
    Going concern assumption affects income computation and disclosure, requiring a different measurement basis if materially impinged.
    Going concern is the assumption that an assessee will continue operations and has no intent or necessity to liquidate or materially curtail business; it underpins periodic income computation and financial statements and applies in the absence of contrary information. Material uncertainties that cast doubt on going concern may impinge this assumption. ICDS I does not specify computation methods when going concern is not met; absent such mandate an assessee may follow the Framework for the Preparation and Presentation of Financial Statements and prepare statements on a different basis, affecting recognition, measurement and disclosure.
    ManualsIncome Tax
    ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific discl...
    Show AI Summary
    ICDS disclosure requirements must be reported in tax audit reports and reflected in amended income tax return schedules.
    ICDS require disclosure of accounting policies and ICDS adjustments; the net effect must be disclosed in the Return of Income. Disclosures required under ICDS shall be made in the tax audit report in Form 3CD for taxpayers subject to tax audit, and no separate disclosure regime exists for those not liable to tax audit; return forms were amended to include a schedule ICDS.
    ManualsIncome Tax
    In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, wh...
    Show AI Summary
    ICDS supremacy - where ICDS conflicts with CBDT circulars or press releases, the ICDS treatment prevails.
    Where ICDS provisions conflict with earlier CBDT circulars or press releases, the later ICDS provisions prevail for the period after they take effect; CBDT circulars and press releases are interpretative guidance binding on tax officers but not on taxpayers.
    ManualsIncome Tax
    Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation a...
    Show AI Summary
    DTAA supremacy: ICDS governs income computation when the treaty is silent, non-conflicting, or specifies only tax rate.
    ICDS apply to non-residents claiming DTAA benefits only where the DTAA is silent, where there is no conflict between ICDS computation and treaty treatment, where the income falls outside the DTAA's scope, or where the DTAA fixes a tax rate but does not prescribe the method of computing the income, in which case ICDS governs computation.
    ManualsIncome Tax
    When can a provision be recognized as per ICDS X.
    Show AI Summary
    Recognition of provisions under ICDS X requires a present obligation, probable outflow of resources, and a reliable estimate.
    Recognition of a provision under ICDS X requires a present obligation from a past event, a reasonably certain outflow of resources to settle the obligation, and a reliable estimate of the obligation amount; routine future operating costs must not be recognised as provisions.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Home› TMI Notes › Income Tax › Act-Rules › Category › This
      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters
      Income Tax

      Comparison of section 214 "Tax on investment income and long-term capital gains." 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

      Print Options

      Section 214 Tax on investment income and long-term capital gains.

      Income-tax Act, 2025

      At a Glance

      These documents are two versions of Clause/Section 214 dealing with tax rates on investment income and long-term capital gains of non-resident Indians (NRIs). They matter because they prescribe special rates applicable to categories of income of NRIs and thus affect tax incidence for taxpayers and revenue administration. The Bill version is labelled "Old Version"; the enacted Section (Income-tax Act, 2025) shows a different table structure. Effective date or decision date: Not stated in the document.

      Background & Scope

      Statutory hooks: Both texts are framed under the rubric "Special provisions relating to non-residents and foreign company" and labelled 214. The subject is tax on investment income and long-term capital gains of an assessee who is a non-resident Indian. Both present a table with three rows corresponding to categories of income and the tax payable on each. Definitions or explanatory notes: Not stated in the document.

      Statutory Provision Mode

      Text & Scope

      Coverage: Both provisions apply to the total income of an assessee who is a non-resident Indian and which includes incomes specified in column B of the respective tables. Ingredients/elements: the tables list three categories of income with the tax payable associated with each. Specific entries:

      • Bill (Old Version): Row 1 - income from investment OR income from long-term capital gains of an asset other than a specified asset: taxed at 20%; Row 2 - LTCG on specified asset at 12.5%; Row 3 - residual total income taxed as ordinarily chargeable.

      • Enacted Section: Row 1 - income from investment at 20%; Row 2 - LTCG on specified asset at 12.5%; Row 3 - residual taxed at "rates in force."

      Interpretation

      Legislative intent and interpretive principles indicated by the text: Not stated in the document. The enacted provision's formulaic wording ("computed at the rate specified ... applied on the corresponding income") suggests a rule that each listed income category is to be separately taxed at the specified rate and then aggregated. Whether LTCG on non-specified assets are included in "income from investment" or are to be treated under residual rates is not specified and must be resolved by reference to other parts of the statute or legislative history, which are not provided in the documents.

      Exceptions/Provisos

      Carve-outs, thresholds, or conditional provisos: Not stated in the document. No provisos, step-ups, exemptions, or threshold tests appear in either table entry supplied.

      Illustrations

      • Example 1 (consistent with Bill text): An NRI has investment income of INR X, LTCG of INR Y on a non-specified asset, and other income INR Z. Under the Bill's table, investment income + LTCG on non-specified asset would each be taxed at 20%, LTCG on specified asset (if any) at 12.5%, and remaining income at ordinary rates. (Concrete numbers: Not stated in the document.)

      • Example 2 (consistent with enacted Section): An NRI has investment income INR A, LTCG on a specified asset INR B, LTCG on a non-specified asset INR C, and other income INR D. Under the enacted Section, investment income A taxed at 20%, LTCG on specified asset B taxed at 12.5%, and the treatment of C is not specified in the table-thus either it falls under "rates in force" or is to be treated as part of another category; the document does not state which.

      Interplay

      Interaction with Rules/Notifications/Circulars: Not stated in the document. Any interplay with other sections of the Income-tax Act, underlying definitions of "specified asset," or procedural rules is not provided in the texts and therefore not addressed here.

      Differences between the two provisions and practical impact

      • Structural difference in table row 1: - Bill (Old Version) - Row 1: "Income from investment or income from long-term capital gains of an asset other than a specified asset." Rate: 20%. - Enacted Section - Row 1: "Income from investment." Rate: 20%.
        • Practical impact: The Bill expressly taxed long-term capital gains (LTCG) on non-specified assets at 20% along with investment income. The enacted Section removes explicit reference to LTCG on non-specified assets from this 20% category, thereby creating potential divergence in the tax treatment of LTCG on non-specified assets between the Bill and the enacted provision (see further points).
      • Row 2 similarity and clarification: - Both texts: Row 2 taxes "Income from long-term capital gains on specified asset" at 12.5%.
        • Practical impact: There is consistency in special concessional rate (12.5%) for LTCG on specified assets for NRIs in both versions.
      • Treatment of residual income (Row 3): - Bill (Old Version) - Row 3: "Total income as reduced by income referred to against serial numbers 1 and 2. Income-tax chargeable on such income." (That is, tax as ordinarily chargeable.) - Enacted Section - Row 3: "Total income as reduced by income referred to against serial numbers 1 and 2. Rates in force."
        • Practical impact: Both indicate that remaining income is taxed under general rates. The enacted text's phrasing "Rates in force" is succinct but substantively aligns with the Bill's "Income-tax chargeable on such income." No difference in tax base implied for the residual amount itself, but combined with change to Row 1, the overall taxable quantum under general rates could be different.
      • Net effect/ambiguity regarding LTCG on assets other than "specified asset": - Bill clearly brings LTCG on non-specified assets into the special 20% charge. - Enacted Section does not mention LTCG on non-specified assets; it only lists "Income from investment" at 20% and separately LTCG on specified asset at 12.5%.
        • Practical impact: The omission in the enacted text creates interpretive uncertainty as to whether LTCG on non-specified assets continue to attract the 20% special rate or are taxed at "rates in force" (i.e., ordinary rates) as residual income. This materially affects NRIs holding long-term assets not classified as "specified asset": under the Bill they would have been subject to a flat 20% charge; under the enacted text they may be outside the 20% bucket and therefore could be taxed differently. The document does not resolve this interpretive issue. (Analytical note: the text does not state where LTCG on non-specified assets fall; therefore any definitive allocation is "Not stated in the document.")
      • Terminology and drafting precision: - Bill uses longer descriptive language ("Income-tax payable ... shall be the aggregate of the amounts mentioned in column C thereof"). - Enacted Section uses "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."
        • Practical impact: The enacted text explicitly frames the computation as applying a rate to the corresponding income, which is drafting clarity. The Bill's phrasing is functionally similar but less formulaic. No substantive tax computation change is expressly stated beyond what the tables show.

      Practical Implications

      • Compliance and risk areas: The primary compliance risk arises from the divergent textual treatment of LTCG on assets other than "specified asset." Taxpayers and withholding agents (if applicable) require clarity on whether such gains attract the 20% special rate (as in the Bill) or fall outside that bracket under the enacted Section. Without explicit direction in the document, inconsistent application and disputes are likely.
      • Record-keeping/evidence points: Taxpayers should maintain clear documentation identifying (i) whether an asset is a "specified asset" (definition not in the document), (ii) characterisation of receipts as "income from investment" versus capital gains, and (iii) computations segregating amounts taxed at special rates versus residual income taxed at general rates. The document itself does not prescribe supporting documents or forms; therefore these records are prudent based on the table distinctions.

      Key Takeaways

      • Both texts create special tax rates for certain categories of income of NRIs: 20% for certain investment income and 12.5% for LTCG on "specified asset."
      • The Bill (Old Version) explicitly taxed LTCG on assets other than specified assets at 20%; the enacted Section omits that explicit clause and instead lists only "income from investment" at 20%.
      • The omission in the enacted text creates ambiguity about the tax treatment of LTCG on non-specified assets (whether they remain at 20% or are taxed at general rates); the document does not resolve this.
      • No definitions (including "specified asset"), thresholds, exemptions, or effective date are provided in the documents; those matters are "Not stated in the document."
      • Taxpayers and administrators will need statutory cross-reference or official guidance to determine where LTCG on non-specified assets are to be taxed; absent that, differing interpretations and disputes may arise.

      Full Text:

      Section 214 Tax on investment income and long-term capital gains.

      Topics

      ActsIncome Tax
      Next ➔