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Home Acts & Rules Bill Bills FINANCE BILL, 2020 Chapters List Chapter III DIRECT TAXES - Income-tax This
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Clause 86 - Amendment of section 196A. - FINANCE BILL, 2020

Chapter III
DIRECT TAXES - Income-tax
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Amendment of section 196A.

86. In section 196A of the Income-tax Act, in sub-section (1),––

(a) for the words “of the Unit Trust of India”, the words, brackets and figures “from the specified company referred to in the Explanation to clause (35) of section 10” shall be substituted;

(b) for the words “in cash or by the issue of a cheque or draft or by any other mode”, the words “ by any mode” shall be substituted;

(c) the proviso shall be omitted.



Notes on Clauses:

Clause 86 of the Bill seeks to amend section 196A of the Income-tax Act relating to income in respect of units of non-residents.

Sub-section (1) of the said section provides that any person responsible for paying to a non-resident, not being a company, or to a foreign company, any income in respect of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty per cent.

It is proposed to amend the said sub-section to substitute the expression “Unit Trust of India” referred to in the said sub-section with “specified company referred to in the Explanation to clause (35) of section 10; and to enable credit of income or payment thereof by any mode.

Proviso to this sub-section provides that no deduction shall be made under this section from any such income credited or paid on or after the 1st day of April, 2003.

It is further proposed to omit the proviso to the said subsection.

These amendments will take effect from 1st April, 2020.

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