Income Tax Act, 2025
Section 3: Ins. by Act 8 of 2011, s. 15 (w.e.f. 12011).
3. Ins. by Act 8 of 2011, s. 15 (w.e.f. 12011).
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(3) Notwithstanding anything to the contrary contained in this Act, no deduction,—
(a) in respect of any payment made to any financial institution located in a notified jurisdictional
area shall be allowed under this Act, unless the assessee furnishes an authorisation in the
prescribedform authorisingthe Board or any other income-tax authority acting on its behalf to seek
relevant information from the said financial institution on behalf of such assessee; and
(b) in respect of any other expenditure or allowance (including depreciation) arising from the
transaction with a person located in a notified jurisdictional area shall be allowed under any other
provision of this Act, unless the assessee maintains such other documents and furnishes such
information as may be prescribed, in this behalf.
(4) Notwithstanding anything to the contrary contained in this Act, where, in any previous year, the
assessee has received or credited any sum from any person located in a notified jurisdictional area and the
assessee does not offer any explanation about the source of the said sum in the hands of such person or in
the hands of the beneficial owner (if such person is not the beneficial owner of the said sum) or the
explanation offered by the assessee, in the opinion of the Assessing Officer, is not satisfactory, then, such
sum shall be deemed to be the income of the assessee for that previous year.
(5) Notwithstanding anything contained in any other provisions of this Act, where any person located
in a notified jurisdictional area is entitled to receive any sum or income or amount on which tax is
deductible under Chapter XVIIB, the tax shall be deducted at the highest of the following rates,
namely:—
(a) at the rate or rates in force;
(b) at the rate specified in the relevant provisions of this Act;
(c) at the rate of thirty per cent.
(6) In this section,—
(i) “person located in a notified jurisdictional area” shall include,—
(a) a person who is resident of the notified jurisdictional area;
(b) a person, not being an individual, which is established in the notified jurisdictional area;
or
(c) a permanent establishment of a person not falling in sub-clause (a) or sub-clause (b), in
the notified jurisdictional area;
(ii) “permanent establishment” shall have the same meaning as defined in clause (iiia) of section
92F;
(iii) “transaction” shall have the same meaning as defined in clause (v) of section 92F.]
1[94B. Limitation on interest deduction in certain cases.––(1) Notwithstanding anything contained
in this Act, where an Indian company, or a permanent establishment of a foreign company in India, being
the borrower, incurs any expenditure by way of interest or of similar nature exceeding one crore rupees
which is deductible in computing income chargeable under the head “Profits and gains of business or
profession” in respect of any debt issued by a nonresident, being an associated enterprise of such
borrower, the interest shall not be deductible in computation of income under the said head to the extent
that it arises from excess interest, as specified in sub-section (2):
Provided that where the debt is issued by a lender which is not associated but an associated enterprise
either provides an implicit or explicit guarantee to such lender or deposits a corresponding and matching
amount of funds with the lender, such debt shall be deemed to have been issued by an associated
enterprise.
Notwithstanding anything to the contrary contained in this Act, no deduction,—
in respect of any payment made to any financial institution located in a notified jurisdictional
area shall be allowed under this Act, unless the assessee furnishes an authorisation in the
prescribedform authorisingthe Board or any other income-tax authority acting on its behalf to seek
relevant information from the said financial institution on behalf of such assessee; and
in respect of any other expenditure or allowance (including depreciation) arising from the
transaction with a person located in a notified jurisdictional area shall be allowed under any other
provision of this Act, unless the assessee maintains such other documents and furnishes such
information as may be prescribed, in this behalf.
Notwithstanding anything to the contrary contained in this Act, where, in any previous year, the
assessee has received or credited any sum from any person located in a notified jurisdictional area and the
assessee does not offer any explanation about the source of the said sum in the hands of such person or in
the hands of the beneficial owner (if such person is not the beneficial owner of the said sum) or the
explanation offered by the assessee, in the opinion of the Assessing Officer, is not satisfactory, then, such
sum shall be deemed to be the income of the assessee for that previous year.
Notwithstanding anything contained in any other provisions of this Act, where any person located
in a notified jurisdictional area is entitled to receive any sum or income or amount on which tax is
deductible under Chapter XVIIB, the tax shall be deducted at the highest of the following rates,
namely:—
at the rate or rates in force;
at the rate specified in the relevant provisions of this Act;
at the rate of thirty per cent.
In this section,—
“person located in a notified jurisdictional area” shall include,—
a person who is resident of the notified jurisdictional area;
a person, not being an individual, which is established in the notified jurisdictional area;
or
a permanent establishment of a person not falling in sub-clause
or sub-clause
“permanent establishment” shall have the same meaning as defined in clause
of section
92F;
“transaction” shall have the same meaning as defined in clause
of section 92F.]
1[94B. Limitation on interest deduction in certain cases.––
Notwithstanding anything contained
in this Act, where an Indian company, or a permanent establishment of a foreign company in India, being
the borrower, incurs any expenditure by way of interest or of similar nature exceeding one crore rupees
which is deductible in computing income chargeable under the head “Profits and gains of business or
profession” in respect of any debt issued by a nonresident, being an associated enterprise of such
borrower, the interest shall not be deductible in computation of income under the said head to the extent
that it arises from excess interest, as specified in sub-section