Income Tax Act, 2025
Section 3: Subs. by Act 32 of 2003, s. 52, for “income by way of dividends” (w.e.f. 12004).
3. Subs. by Act 32 of 2003, s. 52, for “income by way of dividends” (w.e.f. 12004).
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Explanation.—For the purposes of this section,—
(a) “Global Depository Receipts” means any instrument in the form of a depository receipt or
certificate (by whatever name called) created by the Overseas Depository Bank outside India
and 1[issued to investors against the issue of,—
(i) ordinary shares of issuing company, being a company listed on a recognised stock
exchange in India; or
(ii) foreign currency convertible bonds of issuing company];
(b) “information technology service” means any service which results from the use of any
information technology software over a system of information technology products for realising value
addition;
(c) “information technology software” means any representation of instructions, data, sound or
image, including source code and object code, recorded in a machine readable form and capable of
being manipulated or providing inter-activity to a user, by means of an automatic data processing
machine falling under heading information technology products but does not include non-information
technology products;
(d) “Overseas Depository Bank” means a bank authorised by the issuing company to issue Global
Depository Receipts against issue of Foreign Currency Convertible Bonds or ordinary shares of the
issuing company.]
2[115AD. Tax on income of Foreign Institutional Investors from securities or capital gains
arising from their transfer.—(1) Where the total income of a Foreign Institutional Investor includes—
3[(a) 4[income other than income by way of dividends referred to in section 115-O] received in
respect of securities (other than units referred to in section 115AB); or]
(b) income by way of short-term or long-term capital gains arising from the transfer of such
securities,
the income-tax payable shall be the aggregate of—
(i) the amount of income-tax calculated on the income in respect of securities referred to in
clause (a), if any, included in the total income, at the rate of twenty per cent:
5[Provided that the amount of income-tax calculated on the income by way of interest referred to
in section 194LD shall be at the rate of five per cent.;]
(ii) the amount of income-tax calculated on the income by way of short-term capital gains
referred to in clause (b), if any, included in the total income, at the rate of thirty per cent:
6[Provided that the amount of income-tax calculated on the income by way of short-term capital
gains referred to in section 111A shall be at the rate of 7[fifteen per cent.];]
1. Subs. by Act 20 of 2015, s. 29, for “issued to non-resident inventors against the issue of ordinary shares or foreign
currency convertible bonds of issuing company” (w.e.f. 12016).
“Global Depository Receipts” means any instrument in the form of a depository receipt or
certificate (by whatever name called) created by the Overseas Depository Bank outside India
and 1[issued to investors against the issue of,—
ordinary shares of issuing company, being a company listed on a recognised stock
exchange in India; or
foreign currency convertible bonds of issuing company];
“information technology service” means any service which results from the use of any
information technology software over a system of information technology products for realising value
addition;
“information technology software” means any representation of instructions, data, sound or
image, including source code and object code, recorded in a machine readable form and capable of
being manipulated or providing inter-activity to a user, by means of an automatic data processing
machine falling under heading information technology products but does not include non-information
technology products;
“Overseas Depository Bank” means a bank authorised by the issuing company to issue Global
Depository Receipts against issue of Foreign Currency Convertible Bonds or ordinary shares of the
issuing company.]
2[115AD. Tax on income of Foreign Institutional Investors from securities or capital gains
arising from their transfer.—
Where the total income of a Foreign Institutional Investor includes—
3[
4[income other than income by way of dividends referred to in section 115-O] received in
respect of securities (other than units referred to in section 115AB); or]
income by way of short-term or long-term capital gains arising from the transfer of such
securities,
the income-tax payable shall be the aggregate of—
the amount of income-tax calculated on the income in respect of securities referred to in
clause
the amount of income-tax calculated on the income by way of short-term capital gains
referred to in clause