Part D - International Taxation

2 Non Resident Taxation

Chapter MAP
Part A Part B Part C Part D
Sec 115C - Special Rates of Tax for NR - Sec 115AC Taxation of Presumptive Taxation
Taxation of NRI Sec 115A, 115AB, 115AD, 115BBA Income on Bonds & GDR - Ship, Aircraft etc.

Part A - One Section

1. Sec 115C Taxation of NRI (This provision is optional to NRI)

NRI Means NR + Indian citizen / Person of Indian origin.
Person of Indian Origin means if he, or either of his parents or any of his grand­parents, was born
in undivided India

• Type of Income
1. Interest Income 2. LTCG 3. Other incomes
Interest from foreign exchange assets# LTCG from foreign exchange assets#
• Tax Rates @ 20% • Tax Rates @ 10% • Tax Rates
@ Normal Tax Rate
• Method • Method • Method
- Dedn u/s 28to 44C, S. 57 not available - Chapter VI-A Dedn. Not Available - Normal Provisions
- Chapter VI-A are not available. - Indexation Benefit Not Available

# Foreign Exchange Any of the following assets acquired / purchased in foreign exchange (FOREX).
Assets i. Shares of Indian company (Public/ Private) ii. Debenture of Indian Public Co.
iii. Deposits with an Indian Public company iv. Securities of Central Govt.
v. Any other asset as may be notified by CG
Section 115F LTCG on FOREX asset shall be exempt if net consideration is utilized for acquiring other FOREX
Exemption on LTCG assets with 6 Months from the date of transfer.
Exempt Amount = LTCG x Cost of New Asset / Net Consideration
Section 115G ROI not required to be filed if :
Exemption from Filing a) Total Income include only Interest Income & LTCG.
of ROI b) TDS already deducted.
Section 115-I The above provisions are optional means Assessee can pay Normal tax on LTCG &
Interest income instead of 10% & 20%.

Part B - Four Section

1. Sec 115A Interest, Royalty, Fees for Technical Service recd by NR/Foreign Company
• Interest
Type of Income Payable to From Rate TDS
A. Interest NR / F. Company Infrastructure Debt Fund [Sec 10(47)] @5% 194LB 5%
(Asked in Nov 19 - New Syllabus)
B. Interest on Loan NR / F. Company Indian Co. / Business Trust - Loan in Foreign @5% 194LC 5%
Currency, RDB, Long Term Bond
C. Interest on FII / QFI* Investment made in RDB of Indian Company or @5% 194LD 5%
Investment Government Securities

D. Interest on Unit NR Unit holder Business Trust (REIT / InVIT) @5% 194LBA 5%
E. Interest on NR / F. Company Government or Indian Concern (Nov 18 Q7) @20% Sec 195
F. Currency Loan (Other than A,B,C,D)
*FII - Foreign Institutional Investor, QFI - Qualified Foreign Investor, RDB- Rupee Denominated Bond

Dividend received --> by NR / FC Taxable @ 20%

Income received --> from UTI / MF Taxable @ 20%

DT(Final) Last Day Revision Notes - By Sanjay Zanwar, 9765974365, Telegram Channel @DT_LDR 1
• Royalty / Fee for technical service (FTS)
Particular If there is no PE in India --> Sec 115A If there is PE in India --> Sec 44DA
Taxable @ 10% Normal Tax Rate
TDS Dend u/s Sec 195 Sec 195

Return Filing if income The assessee is not required to furnish Return u/s 139(1) if -
u/s 115A a. The Total income consists of only Interest / Dividend Income referred above and
b. the TDS has been deducted from such income.
Benefit not available - Deduction under chapter VI-A - Indexation Benefit (in case CG)
for Sec 115A - Basic Exemption (Slab) - Deduction u/s 28 to 44C / Sec 57
Note - Deduction u/c VI-A available against Royalty & FTS referred in Sec 115A

2. Sec 115AB LTCG to "Overseas Financial Organization" on units of UTI/MF

Tax Rate --> @10% TDS Dedn u/s --> Sec 196B
If STT Paid --> Benefit of Sec 111A (STCG @ 15%) and Sec 112A (LTCG @ 10% in excess of 1 Lakh)
Benefit not available - Deduction under chapter VI-A - Indexation Benefit (in case CG)
- Basic Exemption (Slab) - Deduction u/s 28 to 44C / Sec 57

3. Sec 115AD Capital Gain & Interest on Security of FII (Max Surcharge is 15% on CG)
Income --> Income recd by Foreign Institutional Investors (FII) on securities (other than units of UTI/MF).
Taxable at the rate LTCG STCG u/s 111A STCG Other Interest
@ 10% @ 15% @ 30% @ 20%
Sec 195 Sec 195 Sec 195 194LD 5%
Note - If Sec 112A apply then income tax @10% on income exceeding 1 lakh

Benefit not available - Deduction under chapter VI-A - Indexation Benefit (in case CG)
- Basic Exemption (Slab) - Deduction u/s 28 to 44C / Sec 57

4. Sec 115BBA Income of NR Sports Person, Sports Association & Entertainer

Basic • Tax rate @20% • TDS u/s - 194E
Benefit not available - Deduction under chapter VI-A - Indexation Benefit (in case CG)
- Basic Exemption (Slab) - Deduction u/s 28 to 44C / Sec 57
Sportsman means (including an athlete), who is not a citizen of India and is a non-resident Any income received or
receivable by way of
Note - Umpire, NR 1. Participation in India in any game or sport
Commentator and Note - Game does not include which are taxable u/s 115BB --> being winning from crossword
Referee are not a Sport puzzles, races including horse races, card games & gambling or betting
Person
2. Advertisement;
3. Contribution of articles relating to any sport in India in newspapers, magazines / journals;
Entertainer means An entertainer who is not a citizen of India and is a non-resident
Return Filing The assessee is not required to furnish Return u/s 139(1) if -
a. his total income in respect of which he is assessable under this Act during the PY consisted only
of income referred u/s 115BBA and
b. the TDS under the provisions of Chapter XVII-B has been deducted from such income.

DT(Final) Last Day Revision Notes - By Sanjay Zanwar, 9765974365, Telegram Channel @DT_LDR 2
Part C - Bonds & GDR

Sec 115AC LTCG and Interest from --> Bonds and GDR
Income Income received by NR / Foreign Company on 'Bonds of Indian Company'
Income received by NR / Foreign Company on 'GDR acquired in Foreign Currency'
Tax Rate Interest @10% TDS Dedn u/s 196C
LTCG @10% TDS Dedn u/s 196C

Benefit not available - Deduction under chapter VI-A - Indexation Benefit (in case CG)
- Basic Exemption (Slab) - Deduction u/s 28 to 44C / Sec 57
Return Filing The assessee is not required to furnish Return u/s 139(1) if -
a. The Total income consists of only Interest / Dividend Income referred above and
b. the TDS has been deducted from such income.
Transfer of Bonds / Not considered as transfer for calculation of capital gain [Sec 47 (viiia)]
GDR If transfer made outside India by one NR to another NR shall not be treated as transfer

Part D - Presumptive Scheme

Particular Sec 44B Sec 44BBA Sec 44BB Sec 44BBB

Nature of Business Shipping Business Operation of Aircraft Mineral Oil, N. Gas * Turnkey Power Project #
Eligible assessee Non-resident Non-resident Non-resident Foreign Co. only
Presumptive Income 7.5% of Freight 5% of Total Freight 10% Service charge rcd. 10% of sum recd
Income means 1. Amount paid / payable 1. Amount paid or Amount paid or payable,
Specified sum which is - - on account of carriage of passengers, payable, Such service against Such service.
-> livestock, mail or goods provided in India
- shipped at / from any port / place in
India; and 2. Amount recd or deemed
to be recd in India, Such
2. Amt recd. / deemed to be recd in India service provided outside
Note in Sec 44B - - on account of carriage of passengers, India
Demurrage (+) livestock mail or goods
Handling charges also - shipped at / from any port / place outside
to be included India

Option to declare lower Not Available Not Available Lower profits may be claimed u/s 44BB & u/s 44BBB
profit but assessee
- maintains Books of account u/s 44AA &
- gets them audited u/s 44 AB.

* Sec 44BB Business of providing services & facilities for or supplying P&M on hire, used or to be used in the
exploration & exploitation of Mineral oils, Petroleum and Natural gas

# Sec 44BBB - Business of civil construction or

- Business of erection of P&M or testing or commissioning thereof,
- in connection with Turnkey Power Projects approved by CG

DT(Final) Last Day Revision Notes - By Sanjay Zanwar, 9765974365, Telegram Channel @DT_LDR 3