Amendment of Section 115R
29. In section 115R of the Income-tax Act, in sub-section (2), with effect from the 1st day of June, 2013,—
(a) in clause (ii), for the words “twelve and one-half per cent.”, the words “twenty-five per cent.” shall be substituted;
(b) after sub-clause (iii) and before the proviso, the following proviso shall be inserted, namely:—
“Provided that where any income is distributed by a mutual fund under an infrastructure debt fund scheme to a non-resident (not being a company) or a foreign company, the mutual fund shall be liable to pay additional income-tax at the rate of five per cent. on income so distributed:”;
(c) in the proviso, for the words “Provided that ”, the words “Provided further that” shall be substituted;
(d) for the Explanation, the following Explanation shall be substituted, namely:—
‘Explanation.—For the purposes of this sub-section,—
(i) “administrator” and “specified company” shall have the meanings respectively assigned to them in the Explanation to clause (35) of section 10;
(ii) “infrastructure debt fund scheme” shall have the same meaning as assigned to it in clause (1) of regulation 49L of the Securities and Exchange Board of India (Mutual Funds)
Regulations, 1996 (22 of 1996) made under the Securities and Exchange Board of India Act, 1992.’.(15 of 1992)
Notes on Clauses:
Clause 29 of the Bill seeks to amend section 115R of the Income-tax Act relating to tax on distributed income to unit holders.
The existing provisions contained in sub-section (2) of the aforesaid section provides that any amount of income distributed by the specified company or a Mutual Fund to its unit holders shall be chargeable to tax and under clause (ii) thereof such specified company or Mutual Fund shall be liable to pay additional income-tax on such distributed income at the rate of twelve and one-half per cent. on income distributed to any person being an individual or a Hindu undivided family by a fund other than a money market mutual fund or a liquid fund.
It is proposed to amend clause (ii) of sub-section (2) of the aforesaid section to provide that the additional income-tax at the rate of twenty-five per cent. shall be leviable on income distributed to an individual or a Hindu undivided family by a fund other than money market mutual fund or a liquid fund. It is further proposed to amend the said sub-section to provide that any income distributed by a mutual fund under an infrastructure debt scheme to a non-resident (other than a company) or a foreign company shall be liable for payment of additional income-tax at the rate of five per cent. on the income distributed.
It is also proposed to define the expression “infrastructure debt fund scheme” in the proposed amendments.
These amendments will take effect from 1st June, 2013.
