Income Tax Act, 1961
Section 3: Clause (iii) omitted by Act 38 of 1993, s. 11 (w.e.f. 11993).
3. Clause (iii) omitted by Act 38 of 1993, s. 11 (w.e.f. 11993).
256
1[44D. Special provisions for computing income by way of royalties, etc., in the case of foreign
companies.—Notwithstanding anything to the contrary contained in sections 28 to 44C, in the case of an
assessee, being a foreign company,—
(a) the deductions admissible under the said sections in computing the income by way of royalty
or fees for technical services received 2[from Government or an Indian concern in pursuance of an
agreement made by the foreign company with Government or with the Indian concern] before the 1st
day of April, 1976, shall not exceed in the aggregate twenty per cent of the gross amount of such
royalty or fees as reduced by so much of the gross amount of such royalty as consists of lump sum
consideration for the transfer outside India of, or the imparting of information outside India in respect
of, any data, documentation, drawing or specification relating to any patent, invention, model, design,
secret formula or process or trade mark or similar property;
(b) no deduction in respect of any expenditure or allowance shall be allowed under any of the said
sections in computing the income by way of royalty or fees for technical services received [from
Government or an Indian concern in pursuance of an agreement made by the foreign company with
Government or with the Indian concern] after the 31st day of March, 1976 3[but before the 1st day of
April, 2003;]
4* * * * *
Explanation.—For the purposes of this section,—
(a) “fees for technical services” shall have the same meaning as in 5[Explanation 2 to clause (vii)
of sub-section (1) of section 9] ;
(b) “foreign company” shall have the same meaning as in section 80B;
(c) “royalty” shall have the same meaning as in 6[Explanation 2 to clause (vi) of sub-section (1)
of section 9];
(d) royalty received 2[from Government or an Indian concern in pursuance of an agreement made
by a foreign company with Government or with the Indian concern] after the 31st day of March,
1976, shall be deemed to have been received in pursuance of an agreement made before the 1st day of
April, 1976, if such agreement is deemed, for the purposes of the proviso to clause (vi) of
sub-section (1) of section 9, to have been made before the 1st day of April, 1976.]
7[44DA. Special provision for computing income by way of royalties, etc., in case of nonresidents.— (1) The income by way of royalty or fees for technical services received from Government
or an Indian concern in pursuance of an agreement made by a non-resident (not being a company) or a
foreign company with Government or the Indian concern after the 31st day of March, 2003, where such
non-resident (not being a company) or a foreign company carries on business in India through a
permanent establishment situated therein, or performs professional services from a fixed place of
omitted by Act 38 of 1993, s. 11 (w.e.f. 11993).
256
1[44D. Special provisions for computing income by way of royalties, etc., in the case of foreign
companies.—Notwithstanding anything to the contrary contained in sections 28 to 44C, in the case of an
assessee, being a foreign company,—
the deductions admissible under the said sections in computing the income by way of royalty
or fees for technical services received 2[from Government or an Indian concern in pursuance of an
agreement made by the foreign company with Government or with the Indian concern] before the 1st
day of April, 1976, shall not exceed in the aggregate twenty per cent of the gross amount of such
royalty or fees as reduced by so much of the gross amount of such royalty as consists of lump sum
consideration for the transfer outside India of, or the imparting of information outside India in respect
of, any data, documentation, drawing or specification relating to any patent, invention, model, design,
secret formula or process or trade mark or similar property;
no deduction in respect of any expenditure or allowance shall be allowed under any of the said
sections in computing the income by way of royalty or fees for technical services received [from
Government or an Indian concern in pursuance of an agreement made by the foreign company with
Government or with the Indian concern] after the 31st day of March, 1976 3[but before the 1st day of
April, 2003;]
4* * * * *
Explanation.—For the purposes of this section,—
“fees for technical services” shall have the same meaning as in 5[Explanation 2 to clause
of sub-section
of section 9] ;
“foreign company” shall have the same meaning as in section 80B;
“royalty” shall have the same meaning as in 6[Explanation 2 to clause
of sub-section
of section 9];
royalty received 2[from Government or an Indian concern in pursuance of an agreement made
by a foreign company with Government or with the Indian concern] after the 31st day of March,
1976, shall be deemed to have been received in pursuance of an agreement made before the 1st day of
April, 1976, if such agreement is deemed, for the purposes of the proviso to clause
of
sub-section
of section 9, to have been made before the 1st day of April, 1976.]
7[44DA. Special provision for computing income by way of royalties, etc., in case of nonresidents.—
The income by way of royalty or fees for technical services received from Government
or an Indian concern in pursuance of an agreement made by a non-resident (not being a company) or a
foreign company with Government or the Indian concern after the 31st day of March, 2003, where such
non-resident (not being a company) or a foreign company carries on business in India through a
permanent establishment situated therein, or performs professional services from a fixed place of