India - Income Tax Act 2010 - Saarc

1.765 CH. XVII - COLLECTION AND RECOVERY - DEDUCTION AT SOURCE S. 196A(iii) a corporation established by or under a Central Act which is, underany law for the time being in force, exempt from income-tax on itsincome, or(iv) a Mutual Fund specified under clause (23D) of section 10,where such sum is payable to it by way of interest or dividend in respect of anysecurities or shares owned by it or in which it has full beneficial interest, or anyother income accruing or arising to it.]21[Income in respect of units of non-residents. 22196A. (1) Any person responsible for paying to a non-resident, not being acompany, or to a foreign company, any income in respect of units of aMutual Fund specified under clause (23D) of section 10 or of the Unit Trust ofIndia shall, at the time of credit of such income to the account of the payee or atthe time of payment thereof in cash or by the issue of a cheque or draft or byany other mode, whichever is earlier, deduct income-tax thereon at the rate oftwenty per cent :23[Provided that no deduction shall be made under this section from any suchincome credited or paid on or after the 1st day of April, 2003.](2) Notwithstanding anything contained in sub-section (1), no deduction of taxshall be made from any income payable in respect of units of the Unit Trust ofIndia to a non-resident Indian or a non-resident Hindu undivided family, wherethe units have been acquired from the Unit Trust of India out of the funds in aNon-resident (External) Account maintained with any bank in India or byremittance of funds in foreign currency, in accordance, in either case, with theprovisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and therules made thereunder.Explanation.—For the purposes of this section—(a) 24 “foreign currency” shall have the meaning assigned to it in theForeign Exchange Regulation Act, 1973 (46 of 1973);(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 underthe Unit Trust of India Act, 1963 (52 of 1963);(d) where any income as aforesaid is credited to any account, whethercalled “Suspense account” or by any other name, in the books ofaccount of the person liable to pay such income, such crediting shall21. Substituted by the Finance Act, 1995, w.e.f. 1-7-1995. Prior to its substitution, section 196Awas substituted by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 15-3-1989 and lateramended by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991 and the Finance Act, 1994, w.e.f.1-6-1994.22. See rules 30, 31, 31A, 31AB, 37A and 37BA and Form Nos. 16A, 26AS and 27Q.23. Inserted by the Finance Act, 2003, w.e.f. 1-4-2003. Earlier the proviso was inserted by theFinance Act, 1999, w.e.f. 1-6-1999 and later on omitted by the Finance Act, 2002, w.e.f.1-6-2002.24. For definition of “foreign currency”, see Appendix.