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Statutory Provisions

Home Acts & Rules Bill Bills FINANCE BILL, 2013 Chapters List Chapter III - Part I DIRECT TAXES - Income-tax This

Clause 25 - Amendment of section 115A - FINANCE BILL, 2013

FINANCE BILL, 2013
Chapter III - Part I
DIRECT TAXES - Income-tax
  • Contents

Amendment of section 115A

     25. In section 115A of the Income-tax Act, in sub-section (1), in clause (b), for sub-clauses (A), (AA),(B) and (BB), the following sub-clauses shall be substituted with effect from the 1st day of April, 2014, namely:—

         “(A) the amount of income-tax calculated on the income by way of royalty, if any, included in the total income, at the rate of twenty-five per cent.;

          (B) the amount of income-tax calculated on the income by way of fees for technical services, if any, included in the total income, at the rate of twenty-five per cent.; and”.

 



 

Notes on Clauses:

Clause 25 of the Bill seeks to amend section 115A of the Income-tax Act relating to tax on dividends, royalty and technical service fees in the case of foreign companies.

    The existing provisions of clause (b) of sub-section (1) of the aforesaid section provide for the tax rates on which income by way of royalty or fees for technical services in case of nonresidents (not being a company) or a foreign company, is taxed. Various sub-clauses of the said clause provide for different rates of tax in case of income by way of royalty or fees for technical services based on the date of agreement under which such income is received by the non-resident (not being a company) or a foreign company.

    It is proposed to substitute sub-clauses (A), (AA), (B) and (BB) of the aforesaid clause (b), so as to provide that income by way of royalty or fees for technical services shall be taxable at a uniform rate of twenty-five per cent. if it has been received under an agreement entered after 31st day of March, 1976.

    This amendment will take effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years.

 
 
 
 

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