Amendment of section 115A.
33. In section 115A of the Income-tax Act, in sub-section (4), after clause (b), the following proviso shall be inserted with effect from the 1st day of April, 2020, namely:––
“Provided that nothing contained in this sub-section shall apply to a deduction allowed to a Unit of an International Financial Services Centre under section 80LA.”.
Notes on Clauses:
Clause 33 of the Bill seeks to amend section 115A of the Incometax Act relating to tax on dividends, royalty and technical service fees in the case of foreign companies.
Sub-section (4) of the said section provides that no deduction under Chapter VI-A shall be allowed in respect of income as specified in clause (a) or be allowed in the manner provided in clause (b) thereof to an assessee referred to in sub-section (1), where the gross total income of such assessee consists of only or includes any income referred to in clause (a) of the said sub-section (1).
It is proposed to insert a proviso to the said sub-section so as to exempt a Unit of an International Financial Services, for which deduction is allowed under section 80LA, from the applicability of the provisions of that sub-section.
This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years.
