Income Tax Act, 2025
Section 4: The words “or from India” omitted by Act 28 of 2016, s. 6 (w.e.f. 12017).
4. The words “or from India” omitted by Act 28 of 2016, s. 6 (w.e.f. 12017).
64
Provided that the conditions specified in clauses (e), (f) and (g) shall not apply in case of an
investment fund set up by the Government or the Central Bank of a foreign State or a sovereign fund, or
such other fund as the Central Government may subject to conditions, if any, by notification in the
Official Gazette, specify in this behalf.
(4) The eligible fund manager, in respect of an eligible investment fund, means any person who is
engaged in the activity of fund management and fulfils the following conditions, namely:—
(a) the person is not an employee of the eligible investment fund or a connected person of the
fund;
(b) the person is registered as a fund manager or an investment advisor in accordance with the
specified regulations;
(c) the person is acting in the ordinary course of his business as a fund manager;
(d) the person along with his connected persons shall not be entitled, directly or indirectly, to
more than twenty per cent. of the profits accruing or arising to the eligible investment fund from the
transactions carried out by the fund through the fund manager.
(5) Every eligible investment fund shall, in respect of its activities in a financial year, furnish within
ninety days from the end of the financial year, a statement in the prescribed form, to the prescribed
income-tax authority containing information relating to the fulfilment of the conditions specified in this
section and also provide such other relevant information or documents as may be prescribed.
(6) Nothing contained in this section shall apply to exclude any income from the total income of the
eligible investment fund, which would have been so included irrespective of whether the activity of the
eligible fund manager constituted the business connection in India of such fund or not.
(7) Nothing contained in this section shall have any effect on the scope of total income or
determination of total income in the case of the eligible fund manager.
(8) The provisions of this section shall be applied in accordance with such guidelines and in such
manner as the Board may prescribe in this behalf.
(9) For the purposes of this section,—
(a) “associate” means an entity in which a director or a trustee or a partner or a member or a fund
manager of the investment fund or a director or a trustee or a partner or a member of the fund
manager of such fund, holds, either individually or collectively, share or interest, being more than
fifteen per cent. of its share capital or interest, as the case may be;
(b) “connected person” shall have the meaning assigned to it in clause (4) of section 102;
(c) “corpus” means the total amount of funds raised for the purpose of investment by the eligible
investment fund as on a particular date;
(d) “entity” means any entity in which an eligible investment fund makes an investment;
(e) “specified regulations” means the Securities and Exchange Board of India (Portfolio
Managers) Regulations, 1993 or the Securities and Exchange Board of India (Investment Advisers)
Regulations, 2013, or such other regulations made under the Securities and Exchange Board of India
Act, 1992 (15 of 1992), which may be notified by the Central Government under this clause.]
CHAPTER III
INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME
10. Incomes not included in total income.—In computing the total income of a previous year of any
person, any income falling within any of the following clauses shall not be included—
(1) agricultural income;
65
(2) 1[subject to the provisions of sub-section (2) of section 64,] any sum received by an individual
as a member of a Hindu undivided family, where such sum has been paid out of the income of the
family, or, in the case of any impartible estate, where such sum has been paid out of the income of the
estate belonging to the family;
2[(2A) in the case of a person being a partner of a firm which is separately assessed as such, his
share in the total income of the firm.
Explanation.—For the purposes of this clause, the share of a partner in the total income of a firm
separately assessed as such shall, notwithstanding anything contained in any other law, be an amount
which bears to the total income of the firm the same proportion as the amount of his share in the
profits of the firm in accordance with the partnership deed bears to such profits;]
3* * * * *
4[(4) (i) in the case of a non-resident, any income by way of interest on such securities or bonds as
the Central Government may, by notification in the Official Gazette, specify in this behalf, including
income by way of premium on the redemption of such bonds:
5[Provided that the Central Government shall not specify, for the purposes of this sub-clause, such
securities or bonds on or after the 1st day of June, 2002;]
6[(ii) in the case of an individual, any income by way of interest on moneys standing to his credit
in a Non-Resident (External) Account in any bank in India in accordance with 7[the Foreign
Exchange Management Act, 1999 (42 of 1999)], and the rules made thereunder:
Provided that such individual is a person resident outside India as defined in 8[clause (w)]
ofsection 2of the said Act or is a person who has been permitted by the Reserve Bank of India to
maintain the aforesaid Account;]]
9* * * * *
10[(4B) in the case of an individual, being a citizen of India or a person of Indian origin, who is a
non-resident, any income from interest on such 11[savings certificates issued before the 1st day of
June, 2002] by the Central Government as that Government may, by notification in the Official
Gazette, specify in this behalf:
Provided that the individual has subscribed to such certificates in convertible foreign exchange
remitted from a country outside India in accordance with the provisions of 7[the Foreign Exchange
Management Act, 1999 (42 of 1999)], and any rules made thereunder.
Explanation.—For the purposes of this clause,—
(a) a person shall be deemed to be of Indian origin if he, or either of his parents or any of his
grandparents, was born in undivided India;
and
shall not apply in case of an
investment fund set up by the Government or the Central Bank of a foreign State or a sovereign fund, or
such other fund as the Central Government may subject to conditions, if any, by notification in the
Official Gazette, specify in this behalf.
The eligible fund manager, in respect of an eligible investment fund, means any person who is
engaged in the activity of fund management and fulfils the following conditions, namely:—
the person is not an employee of the eligible investment fund or a connected person of the
fund;
the person is registered as a fund manager or an investment advisor in accordance with the
specified regulations;
the person is acting in the ordinary course of his business as a fund manager;
the person along with his connected persons shall not be entitled, directly or indirectly, to
more than twenty per cent. of the profits accruing or arising to the eligible investment fund from the
transactions carried out by the fund through the fund manager.
Every eligible investment fund shall, in respect of its activities in a financial year, furnish within
ninety days from the end of the financial year, a statement in the prescribed form, to the prescribed
income-tax authority containing information relating to the fulfilment of the conditions specified in this
section and also provide such other relevant information or documents as may be prescribed.
Nothing contained in this section shall apply to exclude any income from the total income of the
eligible investment fund, which would have been so included irrespective of whether the activity of the
eligible fund manager constituted the business connection in India of such fund or not.
Nothing contained in this section shall have any effect on the scope of total income or
determination of total income in the case of the eligible fund manager.
The provisions of this section shall be applied in accordance with such guidelines and in such
manner as the Board may prescribe in this behalf.
For the purposes of this section,—
“associate” means an entity in which a director or a trustee or a partner or a member or a fund
manager of the investment fund or a director or a trustee or a partner or a member of the fund
manager of such fund, holds, either individually or collectively, share or interest, being more than
fifteen per cent. of its share capital or interest, as the case may be;
“connected person” shall have the meaning assigned to it in clause
of section 102;
“corpus” means the total amount of funds raised for the purpose of investment by the eligible
investment fund as on a particular date;
“entity” means any entity in which an eligible investment fund makes an investment;
“specified regulations” means the Securities and Exchange Board of India (Portfolio
Managers) Regulations, 1993 or the Securities and Exchange Board of India (Investment Advisers)
Regulations, 2013, or such other regulations made under the Securities and Exchange Board of India
Act, 1992 (15 of 1992), which may be notified by the Central Government under this clause.]
CHAPTER III
INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME
10. Incomes not included in total income.—In computing the total income of a previous year of any
person, any income falling within any of the following clauses shall not be included—
agricultural income;
65
1[subject to the provisions of sub-section
of section 64,] any sum received by an individual
as a member of a Hindu undivided family, where such sum has been paid out of the income of the
family, or, in the case of any impartible estate, where such sum has been paid out of the income of the
estate belonging to the family;
2[
in the case of a person being a partner of a firm which is separately assessed as such, his
share in the total income of the firm.
Explanation.—For the purposes of this clause, the share of a partner in the total income of a firm
separately assessed as such shall, notwithstanding anything contained in any other law, be an amount
which bears to the total income of the firm the same proportion as the amount of his share in the
profits of the firm in accordance with the partnership deed bears to such profits;]
3* * * * *
4[
(i) in the case of a non-resident, any income by way of interest on such securities or bonds as
the Central Government may, by notification in the Official Gazette, specify in this behalf, including
income by way of premium on the redemption of such bonds:
5[Provided that the Central Government shall not specify, for the purposes of this sub-clause, such
securities or bonds on or after the 1st day of June, 2002;]
6[
in the case of an individual, any income by way of interest on moneys standing to his credit
in a Non-Resident
Account in any bank in India in accordance with 7[the Foreign
Exchange Management Act, 1999 (42 of 1999)], and the rules made thereunder:
Provided that such individual is a person resident outside India as defined in 8[clause
in the case of an individual, being a citizen of India or a person of Indian origin, who is a
non-resident, any income from interest on such 11[savings certificates issued before the 1st day of
June, 2002] by the Central Government as that Government may, by notification in the Official
Gazette, specify in this behalf:
Provided that the individual has subscribed to such certificates in convertible foreign exchange
remitted from a country outside India in accordance with the provisions of 7[the Foreign Exchange
Management Act, 1999 (42 of 1999)], and any rules made thereunder.
Explanation.—For the purposes of this clause,—
a person shall be deemed to be of Indian origin if he, or either of his parents or any of his
grandparents, was born in undivided India;