15. In section 115A of the Income-tax Act, in sub-section (1), in clause (a), with effect from the 1st day of June, 2011,—
(a) in sub-clause (ii), after the words "foreign currency", the words, brackets, figures and letter "not being interest of the nature referred to in clause (iia)" shall be inserted;
(b) after sub-clause (ii), the following sub-clause shall be inserted, namely:—
"(iia) interest received from an infrastructure debt fund referred to in clause (47) of section 10;
or";
(c) after item (B), the following item shall be inserted, namely:—
"(BA) the amount of income-tax calculated on the amount of income by way of interest referred to in sub-clause (iia), if any, included in the total income, at the rate of five per cent.;";
(d) in item (D), after the word, brackets and figures "sub-clause (ii)", the word, brackets, figures and letter ", sub-clause (iia)" shall be inserted.
Notes on Clauses:
Clause 15 of the Bill seeks to amend section 115A of the Income-tax Act, relating to tax on dividends, royalty and technical service fees in case of foreign companies.
Under the existing provisions contained in sub-section (1) of the aforesaid section, the rates at which income-tax shall be payable is prescribed, where the total income of a non-resident (not being a company) or a foreign company, includes any income by way of dividends (other than dividends referred to in section 115-O); or interest received from the Government or an Indian concern on monies borrowed or debt incurred by the Government or the Indian concern in foreign currency; or 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.
It is proposed to amend sub-clause (ii) of clause (a) of sub-section (1) of the aforesaid section so as to provide that the rates at which income-tax shall be payable, where the total income of a non-resident (not being a company) or a foreign company, includes any income by way of interest received from Government or an Indian concern on monies borrowed or debt incurred by the Government or the Indian concern in foreign currency, not being the interest received from an infrastructure debt fund referred to in clause (47) of section 10.
It is further proposed to insert a new sub-clause (iia) in clause (a) of sub-section (1) of the aforesaid section so as to provide that the rates at which income-tax shall be payable, where the total income of a non-resident (not being a company) or a foreign company, includes any income by way of interest received from an infrastructure debt fund referred to in clause (47) of section 10.
It is also proposed to insert a new item (BA) after item (B) of clause (a) of sub-section (1) of the aforesaid section to provide that the tax shall be payable at the rate of five per cent. on any interest income received by a non-resident from an infrastructure debt fund referred to in clause (47) of section 10.
These amendments will take effect from 1st June, 2011.
