Amendment of section 196A.
87. In section 196A of the Income-tax Act, in sub-section (1), the following proviso shall be inserted, namely:––
“Provided that where an agreement referred to in subsection (1) of section 90 or sub-section (1) of section 90A applies to the payee and if the payee has furnished a certificate referred to in sub-section (4) of section 90 or subsection (4) of section 90A, as the case may be, then, incometax thereon shall be deducted at the rate of twenty per cent. or at the rate or rates of income-tax provided in such agreement for such income, whichever is lower.”.
Notes on Clauses:
Clause 87 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 for deduction of tax on payment of any income to a non-resident, not being a company, or to a foreign company in respect of units of a Mutual Fund specified under clause (23D) of the section 10 or from the specified company referred to in the Explanation to clause (35) of the said section at the rate of twenty per cent.
It is proposed to insert a proviso to the said sub-section so as to provide that where an agreement referred to in sub-section (1) of section 90 or sub-section (1) of section 90A applies to the payee and if the payee has furnished a certificate referred to in sub-section (4) of section 90 or sub-section (4) of section 90A, as the case may be, then, income-tax thereon shall be deducted at the rate of twenty per cent. or at the rate or rates of income-tax provided in such agreement for such income, whichever is lower.
This amendment will take effect from 1st April, 2023.
