Section 115AC:
Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer.
1(1) Where the total income of an assessee,
being a non- resident, includes—
(a) income by way of interest on bonds of an Indian company issued in accordance with such
scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf,
or on bonds of a public sector company sold by the Government, and purchased by him in foreign
currency; or
(b) income by way of dividends 2
, other than dividends referred to in section 115-O, on Global
Depository Receipts—
(i) issued in accordance with such scheme as the Central Government may, by notification in
the Official Gazette, specify in this behalf, against the initial issue of shares of an Indian company
and purchased by him in foreign currency through an approved intermediary; or
(ii) issued against the shares of a public sector company sold by the Government and
purchased by him in foreign currency through an approved intermediary; or
(iii) 3
issued or re-issued in accordance with such scheme as the Central Government may,
by notification in the Official Gazette, specify in this behalf, against the existing shares of an
Indian company purchased by him in foreign currency through an approved intermediary; or
4
* * * * *
(c) income by way of long-term capital gains arising from the transfer of bonds referred to in
clause (a) or, as the case may be, Global Depository Receipts referred to in clause (b),
the income-tax payable shall be the aggregate of—
(i) the amount of income-tax calculated on the income by way of interest or dividends 5
, other
than dividends referred to in section 115-O, as the case may be, in respect of bonds referred to in
clause (a) or Global Depository Receipts referred to in clause (b), if any, included in the total income,
at the rate of ten per cent;
(ii) the amount of income-tax calculated on the income by way of long-term capital gains
referred to in clause (c), if any, at the rate of ten per cent; and
(iii) the amount of income-tax with which the non-resident would have been chargeable had his
total income been reduced by the amount of income referred to in clauses (a), (b) and (c).
(2) Where the gross total income of the non-resident—
(a) consists only of income by way of interest or dividends 4
, other than dividends referred to
in section 115-O in respect of bonds referred to in clause (a) of sub-section (1) or, as the case may
be, Global Depository Receipts referred to in clause (b) of that sub-section, no deduction shall be
allowed to him under sections 28 to 44C or clause (i) or clause (iii) of section 57 or under Chapter VIA;
(b) includes any income referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the
gross total income shall be reduced by the amount of such income and the deduction under Chapter
VI-A shall be allowed as if the gross total income as so reduced, were the gross total income of the
assessee.
(3) Nothing contained in the first and second provisos to section 48 shall apply for the computation of
long-term capital gains arising out of the transfer of long-term capital asset, being bonds or Global
Depository Receipts referred to in clause (c) of sub-section (1).
(4) It shall not be necessary for a non-resident to furnish under sub-section (1) of section 139 a return
of his income if—
(a) his total income in respect of which he is assessable under this Act during the previous year
consisted only of income referred to in clauses (a) and (b) of sub-section (1); and
(b) the tax deductible at source under the provisions of Chapter XVII-B has been deducted from
such income.
(5) Where the assessee acquired Global Depository Receipts or bonds in an amalgamated or resulting
company by virtue of his holding Global Depository Receipts or bonds in the amalgamating or demerged
company, as the case may be, in accordance with the provisions of sub-section (1), the provisions of that
sub-section shall apply to such Global Depository Receipts or bonds.
Explanation.—For the purposes of this section,—
(a) “approved intermediary” means an intermediary who is approved in accordance with such
scheme as may be notified by the Central Government in the Official Gazette;
(b) “Global Depository Receipts” shall have the same meaning as in clause (a) of
the Explanation to section 115ACA.
Notes:
1. Subs. by Act 14 of 2001, s. 52, for section 115AC (w.e.f. 1-4-2002).
2. Subs. by Act 32 of 2003, s. 50, for “dividends” (w.e.f. 1-4-2004). Earlier the words, figures and letter “other than
dividends referred to in section 115-O” omitted by Act 20 of 2002, s. 45 (w.e.f. 1-4-2003).
3. Subs. by Act 20 of 2002, s. 46, for “re-issued” (w.e.f. 1-4-2002).
4. Sub-clause (iv) omitted by s. 46, ibid (w.e.f. 1-4-2002).
5. Subs. by Act 32 of 2003, s. 51, for “dividends” (w.e.f. 1-4-2004).