115A Income Tax Act - Tax on dividends, royalty and technical service fees in the case of foreign Companies

Section 115A of Income Tax Act 1961 - Tax on dividends, royalty and technical service fees in the case of foreign Companies

1,2 (1) Where the total income of

(a) a non-resident (not being a company) or of a foreign company, includes any income by way of

(i) 3 dividends other than dividends referred to in section 115-O; or

(ii) interest received from Government or an Indian concern on monies borrowed or debt incurred by Government or the Indian concern in foreign currency 4 not being interest of the nature referred to in 5 sub-clause (iia) or sub-clause (iiaa); or

4 (iia) interest received from an infrastructure debt fund referred to in clause (47) of section 10; or

6 (iiaa) interest of the nature and extent referred to in section 194LC; or

7 (iiab) interest of the nature and extent referred to in section 194LD; or

8(iiac) distributed income being interest referred to in sub-section (2) of section 194LBA;

(iii) income received in respect of units, purchased in foreign currency, of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India, the income-tax payable shall be aggregate of

(A) the amount of income-tax calculated on the amount of income by way of 3 dividends other than dividends referred to in section 115-O, if any, included in the total income, at the rate of twenty per cent;

(B) the amount of income-tax calculated on the amount of income by way of interest referred to in sub-clause (ii), if any, included in the total income, at the rate of twenty per cent.;

4 (BA) the amount of income-tax calculated on the amount of income by way of interest referred to in sub-clause (iia) 9or sub-clause (iiaa) 8 or sub-clause (iiab) 8or sub-clause (iiac), if any, included in the total income, at the rate of five per cent.;

Provided that such book is on a subject, the books on which are permitted, according to the Import Trade Control Policy of the Government of India for the period commencing from the 1st day of April, 1977, and ending with the 31st day of March, 1978, to be imported into India under an Open General Licence:

10 Provided further that such computer software is permitted according to the Import Trade Control Policy of the Government of India for the time being in force to be imported into India under an Open General Licence.

11 Explanation 1.In this sub-section, Open General Licence means an Open General Licence issued by the Central Government in pursuance of the Imports (Control) Order, 1955.

12 Explanation 2.In this sub-section, the expression computer software shall have the meaning assigned to it in clause (b) of the Explanation to section 80HHE.

(2) Nothing contained in sub-section (1) shall apply in relation to any income by way of royalty received by a foreign company from an Indian concern in pursuance of an agreement made by it with the Indian concern after the 31st day of March, 1976, if such agreement is deemed, for the 13 purposes of the first proviso to clause (vi) of sub-section (1) of section 9, to have been made before the 1st day of April, 1976; and the provisions of the annual Finance Act for calculating, charging, deducting or computing income-tax shall apply in relation to such income as if such income had been received in pursuance of an agreement made before the 1st day of April, 1976.

14 (3) No deduction in respect of any expenditure or allowance shall be allowed to the assessee under sections 28 to 44C and section 57 in computing his or its income referred to in sub-section (1).

(4) Where in the case of an assessee referred to in sub-section (1),
(a) the gross total income consists only of the income referred to in clause (a) of that sub-section, no deduction shall be allowed to him or it under Chapter VI-A;

(b) the gross total income includes any income referred to in clause (a) of that sub-section, the gross total income shall be reduced by the amount of such income and the deduction under Chapter VI-A shall be allowed as if the gross total income as so reduced were the gross total income of the assessee.

(5) It shall not be necessary for an assessee referred to in sub-section (1) to furnish under sub-section (1) of section 139 a return of his or its income if

(a) his or its total income in respect of which he or it is assessable under this Act during the previous year consisted only of income referred to in clause (a) of sub-section (1); and

(b) the tax deductible at source under the provisions of Chapter XVII-B has been deducted from such income.

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1. Ins. by Act 66 of 1976, s. 20 (w.e.f. 1-6-1976).
2. Subs. by Act 32 of 1994, s. 32, for sub-section (1) (w.e.f. 1-4-1995).
3. Subs. by Act 32 of 2003, s. 50, for dividends (w.e.f. 1-4-2004). Earlier the word dividends substituted by Act 26 of 1997, s. 32 (w.e.f. 1-4-1998) and the words, figures and letter other than dividends referred to in section 115-O omitted by Act 20 of 2002, s. 45 (w.e.f. 1-4-2003).
4. Ins. by Act 8 of 2011, s. 16 (w.e.f. 1-6-2011).
5. Subs. by Act 23 of 2012, s. 44, for clause (iia) (w.e.f. 1-7-2012).
6. Ins. by s. 44, ibid (w.e.f. 1-7-2012).
7. Ins. by Act 17 of 2013, s. 27 (w.e.f. 1-4-2014).
8. Ins. by Act 25 of 2014, s. 36 (w.e.f. 1-4-2015).
9. Ins. by Act 23 of 2012, s. 44 (w.e.f. 1-7-2012).
10. Ins. by Act 49 of 1991, s. 40 (w.e.f. 1-4-1991).
11. The existing Explanation renumbered as Explanation 1 by s. 40, ibid (w.e.f. 1-4-1991).
12. Ins. by s. 40, ibid. (w.e.f. 1-4-1991).
13. Subs. by s. 40, ibid., for purposes of the proviso (w.e.f. 1-4-1991).
14. Ins. by Act 32 of 1994, s. 32 (w.e.f. 1-4-1995).