Income Tax Act, 2025
Section 6: Subs. by Act 22 of 1995, s. 37, for section 196A (w.e.f. 11995).
6. Subs. by Act 22 of 1995, s. 37, for section 196A (w.e.f. 11995).
656
1[Provided that no deduction shall be made under this section from any such income credited or paid
on or after the 1st day of April, 2003.]
(2) Notwithstanding anything contained in sub-section (1), no deduction of tax shall be made from
any income payable in respect of units of the Unit Trust of India to a non-resident Indian or a non-resident
Hindu undivided family, where the units have been acquired from the Unit Trust of India out of the funds
in a Non-resident (External) Account maintained with any bank in India or by remittance of funds in
foreign currency, in accordance, in either case, with the provisions of 2[the Foreign Exchange
Management Act, 1999 (42 of 1999)], and the rules made thereunder.
Explanation.—For the purposes of this section—
(a) “foreign currency” shall have the meaning assigned to it in 2[the Foreign Exchange
Management Act, 1999 (42 of 1999)];
(b) “non-resident Indian” shall have the meaning assigned to it in clause (e) of section 115C;
(c) “Unit Trust of India” means the Unit Trust of India established under the Unit Trust of India
Act, 1963 (52 of 1963);
(d) where any income as aforesaid is credited to any account, whether called “Suspense account”
or by any other name, in the books of account of the person liable to pay such income, such crediting
shall be deemed to be credit of such income to the account of the payee and the provisions of this
section shall apply accordingly.]
3[196B. Income from units.—4[Where any income in respect of units referred to in section 115AB or
by way of long-term capital gains arising from the transfer of such units is payable to an Offshore Fund],
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 the issue of a cheque or draft or by any other
mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent.]
5[196C. Income from foreign currency bonds or shares of Indian company.—6[Where any
income by way of interest or dividends in respect of 7[bonds or Global Depository Receipts] referred to
in section 115AC or by way of long-term capital gains arising from the transfer of such 7[bonds or Global
Depository Receipts] is payable to a non-resident], 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 the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon
at the rate of ten per cent.]:
8[Provided that no such deduction shall be made in respect of any dividends referred to in
section 115-O.]
1. Ins. by Act 32 of 2003, s. 81 (w.e.f. 12003). Earlier the proviso omitted by Act 20 of 2002, s. 82 (w.e.f.12002)
which was inserted by Act 27 of 1999, s. 75 (w.e.f.11999).
2. Subs. by Act 17 of 2013, s. 4, for “the Foreign Exchange Regulation Act, 1973 (46 of 1973)” (w.e.f. 12013).
Notwithstanding anything contained in sub-section
Account maintained with any bank in India or by remittance of funds in
foreign currency, in accordance, in either case, with the provisions of 2[the Foreign Exchange
Management Act, 1999 (42 of 1999)], and the rules made thereunder.
Explanation.—For the purposes of this section—
“foreign currency” shall have the meaning assigned to it in 2[the Foreign Exchange
Management Act, 1999 (42 of 1999)];
“non-resident Indian” shall have the meaning assigned to it in clause
of section 115C;
“Unit Trust of India” means the Unit Trust of India established under the Unit Trust of India
Act, 1963 (52 of 1963);
where any income as aforesaid is credited to any account, whether called “Suspense account”
or by any other name, in the books of account of the person liable to pay such income, such crediting
shall be deemed to be credit of such income to the account of the payee and the provisions of this
section shall apply accordingly.]
3[196B. Income from units.—4[Where any income in respect of units referred to in section 115AB or
by way of long-term capital gains arising from the transfer of such units is payable to an Offshore Fund],
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 the issue of a cheque or draft or by any other
mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent.]
5[196C. Income from foreign currency bonds or shares of Indian company.—6[Where any
income by way of interest or dividends in respect of 7[bonds or Global Depository Receipts] referred to
in section 115AC or by way of long-term capital gains arising from the transfer of such 7[bonds or Global
Depository Receipts] is payable to a non-resident], 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 the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon
at the rate of ten per cent.]:
8[Provided that no such deduction shall be made in respect of any dividends referred to in
section 115-O.]
1. Ins. by Act 32 of 2003, s. 81 (w.e.f. 12003). Earlier the proviso omitted by Act 20 of 2002, s. 82 (w.e.f.12002)
which was inserted by Act 27 of 1999, s. 75 (w.e.f.11999).
2. Subs. by Act 17 of 2013, s. 4, for “the Foreign Exchange Regulation Act, 1973 (46 of 1973)” (w.e.f. 12013).