Amendment of section 196D.
88. In section 196D of the Income-tax Act, in sub-section (1),––
(a) 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;
(b) the proviso shall be omitted.
Notes on Clauses:
Clause 88 of the Bill seeks to amend section 196D of the Income-tax Act relating to income of Foreign Institutional Investors from securities.
The said section, inter alia, provides that where any income in respect of securities referred to in clause (a) of sub-section (1) of section 115AD, not being income by way of interest referred to in section 194LD, is payable to a Foreign Institutional Investor, the person responsible for making the payment 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 sub-section (1) of the said section so as to enable credit of income or payment thereof by any mode.
It is further proposed to omit the proviso to the said sub-section.
These amendments will take effect from 1st April, 2020.
