Income Tax Act, 2025
Section 7: Subs. by Act 14 of 2001, s. 72, for “bonds or shares” (w.e.f. 12002).
7. Subs. by Act 14 of 2001, s. 72, for “bonds or shares” (w.e.f. 12002).
8. Ins. by Act 32 of 2003, s. 82 (w.e.f. 12003). Earlier the proviso was omitted by Act 20 of 2002, s. 83 (w.e.f. 12002)
which was inserted by Act 26 of 1997, s. 50 (w.e.f. 11997).
657
1[196D. Income of Foreign Institutional Investors from securities.—(1) Where 2[any income in
respect of securities referred to in clause (a) of sub-section (1) of section 115AD, not being income by
way of interest referred to in section 194LD, is payable] to a Foreign Institutional Investor, the person
responsible for making the payment shall, at the time of credit of such income to the account of the payee
or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever
is earlier, deduct income-tax thereon at the rate of twenty per cent.:
3[Provided that no such deduction shall be made in respect of any dividends referred to in section
115-O.]
(2) No deduction of tax shall be made from any income, by way of capital gains arising from the
transfer of securities referred to in section 115AD, payable to a Foreign Institutional Investor.]
197. Certificate for deduction at lower rate.—(1) 4[Subject to rules made under sub-section (2A),
5[where, in the case of 6[any income of any person or sum payable to any person], income-tax is required
to be deducted at the time of credit or, as the case may be, at the time of payment at the rates in force
under the provisions of sections 192, 193, 7[194,] 8[194A, 9[194C, 194D ,194G ,194H ,194-I, 194J , 194K
, 194LA 10[, 194LBB, 194LBC]]] and 195, the Assessing Officer is satisfied]] that the total income 11***
of the recipient justifies the deduction of income-tax 12*** at any lower rates or no deduction of incometax 12***, as the case may be, the 13[Assessing Officer] shall, on an application made by the assessee in
this behalf, give to him such certificate as may be appropriate.
(2) Where any such certificate is given, the person responsible for paying the income shall, until such
certificate is cancelled by the 13[Assessing Officer], deduct income-tax14*** at the rates specified in such
certificate or deduct no tax, as the case may be.
15[(2A) The Board may, having regard to the convenience of assessees and the interests of revenue, by
notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under
which, an application may be made for the grant of a certificate under sub-section (1) and the conditions
subject to which such certificate may be granted and providing for all other matters connected therewith.]
16* * * * *
Where 2[any income in
respect of securities referred to in clause
of sub-section
of section 115AD, not being income by
way of interest referred to in section 194LD, is payable] to a Foreign Institutional Investor, the person
responsible for making the payment shall, at the time of credit of such income to the account of the payee
or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever
is earlier, deduct income-tax thereon at the rate of twenty per cent.:
3[Provided that no such deduction shall be made in respect of any dividends referred to in section
115-O.]
No deduction of tax shall be made from any income, by way of capital gains arising from the
transfer of securities referred to in section 115AD, payable to a Foreign Institutional Investor.]
197. Certificate for deduction at lower rate.—
4[Subject to rules made under sub-section
Where any such certificate is given, the person responsible for paying the income shall, until such
certificate is cancelled by the 13[Assessing Officer], deduct income-tax14*** at the rates specified in such
certificate or deduct no tax, as the case may be.
15[
The Board may, having regard to the convenience of assessees and the interests of revenue, by
notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under
which, an application may be made for the grant of a certificate under sub-section
and the conditions
subject to which such certificate may be granted and providing for all other matters connected therewith.]
16* * * * *