CHAPTER III
DIRECT TAXES
Income-tax
Amendment of section 44DA.
17. In section 44DA of the Income-tax Act, in sub-section (1), after the proviso, the following proviso shall be inserted with effect from the 1st day of April, 2011, namely:—
"Provided further that the provisions of section 44BB shall not apply in respect of the income referred to in this section.".
Notes on Clauses:
Clause 17 of the Bill seeks to amend section 44DA of the Income tax Act relating to special provision for computing income by way of royalties, etc., in case of non-residents.
The existing section 44DA provides the procedure for computing income by way of royalty or fees for technical services, in case the right, property or contract giving rise to such income are effectively connected with the permanent establishment of the non-resident, through which business is carried out in India.
It is proposed to insert a second proviso to the said section so as to clarify that the provisions of section 44BB shall not apply in respect of income referred to in the aforesaid section 44DA.
This amendment will take effect from 1st April, 2011 and will, accordingly, apply in relation to the assessment year 2011-2012 and subsequent years.
