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Amendment of section 9.

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..... he significant economic presence of a non-resident in India shall constitute "business connection" in India and "significant economic presence" for this purpose, shall mean- (a) transaction in respect of any goods, services or property carried out by a non-resident with any person in India including provision of download of data or software in India, if the aggregate of payments arising from such transaction or transactions during the previous year exceeds such amount as may be prescribed; or (b) systematic and continuous soliciting of business activities or engaging in interaction with such number of users in India, as may be prescribed: Provided that the transactions or activities shall constitute significant economic .....

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..... n 2A. ; (v) in Explanation 5,- (I) in the second proviso, after the words, brackets and figures Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 , the words prior to their repeal shall be inserted; (II) after the second proviso, the following proviso shall be inserted, namely:- Provided also that nothing contained in this Explanation shall apply to an asset or a capital asset, which is held by a non-resident by way of investment, directly or indirectly, in Category-I foreign portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, made under the Securities and Exchange Board of India Act, 1992.(15 of 1992.) ; (b) in clause (vi), in Explanation .....

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..... from the assessment year 2021-2022 and subsequent assessment years. It is proposed to insert a new Explanation 2A so as to declare that for the purposes of clause (i) of sub-section (1) of said section, the significant economic presence of a non-resident in India shall constitute "business connection" in India and "significant economic presence" for this purpose, shall mean- (a) transaction in respect of any goods, services or property carried out by a non-resident with any person in India including provision of download of data or software in India, if the aggregate of payments arising from such transaction or transactions during the previous year exceeds such amount as may be provided by rules; or (b) systematic and co .....

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..... from a person who uses internet protocol address located in India. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. It is also proposed to insert a proviso to Explanation 3A to provide that the provisions of the said Explanation shall also apply to the income attributable to the transactions or activities referred to in Explanation 2A. This amendment will take effect from the 1st April, 2022 and will, accordingly, apply in relation to the assessment year 2022-2023 and subsequent assessment years. The Explanation 5 to the said clause provides that an asset or capital asset being any share or interest in a company or entity registere .....

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..... ause (vi) of sub-section (1) of said section deems certain income by way of royalty to accrue or arise in India. Clause (v) of Explanation 2 to said clause defines the term royalty to mean the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting; broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films. It is proposed to amend clause (v) of Explanation 2 to said clause so as to provide that the consideration for the sale, distribution or exhibition of cinematographic films shall not b .....

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