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Understanding the relevant provisions of the Income Tax Act is crucial for both non-residents planning to set up a business in India and residents dealing with non-residents. This article aims to shed light on the key sections that apply to international business transactions.
The Income Tax Act contains various sections that govern income tax liabilities for different scenarios involving non-residents and residents. These sections cover definitions, charge of income-tax, residence status, income deemed to be received or accrued in India, deductions, special provisions for non-residents, capital gains, tax on certain transactions, and more.
For non-residents planning to set up a business in India, provisions related to business connections, taxation on specific business activities like shipping, exploration of mineral oils, operation of aircraft, etc., are vital. Additionally, understanding the provisions related to Transfer Pricing, Avoidance of Double Taxation, and taxation of income from international transactions is essential for non-resident entities.
On the other hand, residents dealing with non-residents must be well-versed with tax deduction and collection provisions when making payments to non-residents. They should also be aware of the reporting and documentation requirements for international transactions. Understanding the tax implications of transactions with persons in notified jurisdictional areas and the application of General Anti-Avoidance Rule (GAAR) is also crucial for residents.
International Business- List of Income Tax Sections to be remembered
|
S. No. |
Section | Particulars |
| 1. | 2 | Definitions |
| 2. | 4 | Charge of income-tax. |
| 3. | 5 | Scope of total income. |
| 4. | 6 | Residence in India. |
| 5. | 7 | Income deemed to be received in India |
| 6. | 9 | Income deemed to accrue or arise in India. |
| 7. | 9A | Certain activities not to constitute business connection in India |
| 8. | 10 | Incomes not included in total income |
| 9. | 28 | Profits and gains of business or profession |
| 10. | 40(a)(i) | Amounts not deductible in case of TDS default |
| 11. | 40(a)(iii) | Salary payable outside India or to a non-resident not deductible in case of TDS default |
| 12. | 44B | Special provision for computing profits and gains of shipping business in the case of non-residents |
| 13. | 44BB | Special provision for computing profits and gains in connection with the business of exploration, etc., of mineral oils. |
| 14. | 44BBA | Special provision for computing profits and gains of the business of operation of aircraft in the case of non-residents. |
| 15. | 44BBB | Special provision for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects. |
| 16. | 44C | Deduction of head office expenditure in the case of non-residents |
| 17. | 44D | Special provisions for computing income by way of royalties, etc., in the case of foreign companies. |
| 18. | 44DA | Special provision for computing income by way of royalties, etc., in case of non-residents. |
| 19. | 45 | Capital gains |
| 20. | 47 | Transactions not regarded as transfer |
| 21. | 48 | Mode of computation |
| 22. | 49 | Cost with reference to certain modes of acquisition |
| 22A. | 80EEB | Deduction in respect of purchase of electric vehicle |
| 22B. | 80-IAC | Special provision in respect of specified business |
| 22C. | 80LA | Deductions in respect of certain incomes of Offshore Banking Units and International Financial Services Centre. |
| 23. | 90 | Agreement with foreign countries or specified territories |
| 24. | 90A | Adoption by Central Government of agreement between specified associations for double taxation relief. |
| 25. | 91 | Countries with which no agreement exists. |
| 26. | 92 | Computation of income from international transaction having regard to arm’s length price. |
| 27. | 92A | Meaning of associated enterprise. |
| 28. | 92B | Meaning of international transaction. |
| 29. | 92BA | Meaning of specified domestic transaction. |
| 30. | 92C | Computation of arm’s length price |
| 31. | 92CA | Reference to Transfer Pricing Officer. |
| 32. | 92CB | Power of Board to make safe harbour rules. |
| 33. | 92CC | Advance pricing agreement. |
| 34. | 92CD | Effect to advance pricing agreement. |
| 34A. | 92CE | Secondary adjustment |
| 35. | 92D | Maintenance and keeping of information and document by persons entering into an international transaction [or specified domestic transaction] |
| 36. | 92E | Report from an accountant to be furnished by persons entering into international transaction [or specified domestic transaction]. |
| 37. | 92F | Definitions of certain terms relevant to computation of arm’s length price, etc. |
| 38. | 93 | Avoidance of income-tax by transactions resulting in transfer of income to non-residents. |
| 39. | 94 | Avoidance of tax by certain transactions in securities. |
| 40. | 94A | Special measures in respect of transactions with persons located in notified jurisdictional area. |
| 40A. | 94B | Limitation on interest deduction |
| 41. | 95 | Applicability of General Anti-Avoidance Rule. |
| 42. | 96 | Impermissible avoidance arrangement. |
| 43. | 97 | Arrangement to lack commercial substance |
| 44. | 98 | Consequences of impermissible avoidance arrangement. |
| 45. | 99 | Treatment of connected person and accommodating party. |
| 46. | 100 | Application of this Chapter. |
| 47. | 101 | Framing of guidelines. |
| 48. | 102 | Definitions. |
| 49. | 111A | Tax on short term capital gain in certain cases |
| 50. | 112 | Tax on long term capital gains |
| 50A | 112A | Tax on long-term capital gains in certain cases |
| 51. | 115A | Tax on dividends, royalty and technical service fees in the case of foreign companies. |
| 52. | 115AB | Tax on income from units purchased in foreign currency or capital gains arising from their transfer |
| 53. | 115AC | Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer. |
| 54. | 115ACA | Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer |
| 55. | 115AD | Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer |
| 56. | 115BBA | Tax on non-resident sportsmen or sports associations. |
| 57. | 115BBD | Tax on certain dividends received from foreign companies |
| 57A. | 115BBJ | Tax on winning from online games |
| 58. | 115C | Definitions relating to chapter on ‘Special provisions relating to certain incomes of non-resident’ |
| 59. | 115D | Special provision for computation of total income of non-residents. |
| 60. | 115E | Tax on investment income and long-term capital gains |
| 61. | 115F | Capital gains on transfer of foreign exchange assets not to be charged in certain cases. |
| 62. | 115G | Return of income not to be filed in certain cases. |
| 63. | 115H | Benefit under Chapter to be available in certain cases even after the assessee becomes resident. |
| 64. | 115-I | Chapter on ‘Special provisions relating to certain incomes of non-resident’ not to apply if the assessee so chooses. |
| 65. | 115JAA | Special provision relating to Minimum Alternate Tax (MAT) Credit |
| 66. | 115JB | Special provisions relating to payment of Minimum Alternate Tax (MAT) by certain companies |
| 67. | 115JC | Special provisions relating to payment of Alternate Minimum Tax (AMT) by certain persons other than a company |
| 68. | 115JD | Tax credit for Alternate Minimum Tax (AMT) |
| 69. | 115JE | Application of other provisions of Act to a person liable to pay Alternate Minimum Tax (AMT) |
| 70. | 115JEE | Application of provisions relating to Alternate Minimum Tax (AMT) to certain persons |
| 71. | 115JF | Interpretation of certain terms referred to in chapter relating to Alternate Minimum Tax (AMT) |
| 72. | 115JG | Conversion of an Indian branch of foreign company into subsidiary Indian company |
| 72A | 115JH | Special provisions relating to foreign company said to be resident in India |
| 72B | 115TCA | Tax on income from securitisation trusts |
| 73. | 115U | Special provisions relating to tax on income received from venture capital companies and venture capital funds |
| 74. | 115UA | Special provisions relating to Business Trust |
| 75. | 115UB | Special provisions relating to tax on income of investment funds and income received from such funds |
| 76. | 139 | Return of income |
| 77. | 139A | Permanent account number |
| 78. | 140 | Return by whom to be signed |
| 79. | 140A | Self-assessment |
| 80. | 160 | Representative assessee |
| 81. | 161 | Liability of representative assessee |
| 82. | 162 | Right of representative assessee to recover taxes paid |
| 83. | 163 | Who may be regarded as agent |
| 84. | 166 | Direct assessment or recovery not barred |
| 85. | 167 | Remedies against property in cases of representative assessee |
| 86. | 172 | Shipping business of non-residents. |
| 87. | 173 | Recovery of tax in respect of non-resident from his assets |
| 88. | 174 | Assessment of persons leaving India. |
| 89. | 192 | Payment of Salary |
| 90. | 192A | Payment of taxable accumulated balance of provident fund to an employee |
| 91. | 194B | Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort |
| 91A. | 194BA | Winning from online games |
| 92. | 194BB | Income by way of winnings from horse races |
| 93. | 194E | Payments to non-resident sportsmen or sports associations. |
| 94. | 194G | Commission, etc., on the sale of lottery tickets |
| 94A. | 194-IB | Payment of rent by certain individuals or Hindu undivided families. |
| 94B. | 194-IC | Payment under specified agreement |
| 94C. | 194K | Income in respect of units |
| 95. | 194LB | Payment of interest on infrastructure debt fund |
| 96. | 194LBA | Certain income distributed by a business trust to its unit holder |
| 97. | 194LBB | Income in respect of units of investment fund |
| 97A | 194LBC | Income in respect of investment in securitisation trust |
| 98. | 194LC | Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) |
| 99. | 194LD | Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor |
| 99A. | 194M | Payment of certain sums by certain individuals or Hindu Undivided Families |
| 99B. | 194-O | Payment of certain sums by e-commerce operator to e-commerce participant |
| 100. | 195 | Payment of any other sums to a non-resident or to a foreign company |
| 101. | 195A | Income payable “net of tax” |
| 102. | 196B | Income from units (including long-term capital gain on transfer of such units) to an offshore fund |
| 103. | 196C | Income from foreign currency bonds or shares of Indian company. |
| 104. | 196D | Income of Foreign Institutional Investors from securities. |
| 105. | 197 | Certificate of deduction at lower rate |
| 106. | 199 | Credit for tax deducted |
| 107. | 200 | Duty of person deducting tax |
| 108. | 201 | Consequences of failure to deduct or pay |
| 109. | 204 | Meaning of person responsible for paying |
| 110. | 205 | Bar against direct demand on assessee |
| 111. | 206AA | Requirement to furnish Permanent Account Number |
| 111A. | 206AB | Special provision for deduction of tax at source for non-filers of Income-tax return |
| 111B. | 206CC | Special provision for collection of tax at source for non-filers of Income-tax return |
| 112. | 207 | Liability for payment of advance tax |
| 113. | 208 | Conditions of liability to pay advance tax |
| 114. | 209 | Computation of advance tax |
| 115. | 210 | Payment of advance tax by the assessee of his own accord or in pursuance of order of Assessing Officer |
| 116. | 211 | Instalment of advance tax and due taxes |
| 117. | 218 | When assessee deemed to be in default |
| 118. | 219 | Credit for advance tax |
| 119. | 220 | When tax payable and when assessee deemed in default |
| 120. | 221 | Penalty payable when tax in default |
| 121. | 222 | Certificate to tax recovery officer |
| 122. | 226 | Other modes of recovery |
| 123. | 228A | Recovery of tax in pursuance of agreements with foreign countries. |
| 124. | 230 | Tax clearance certificate |
| 125. | 234A | Interest for default in furnishing return of income |
| 126. | 234B | Interest for default in payment of advance tax |
| 127. | 234C | Interest for deferment of advance tax |
| 128. | 245N | Provisions relating to advance rulings- Definitions. |
| 129. | 245-O | Authority for Advance Rulings. |
| 129A. | 245-OB | Board for Advance Rulings. |
| 130. | 245P | Vacancies, etc., not to invalidate proceedings. |
| 131. | 245Q | Application for advance ruling. |
| 132. | 245R | Procedure on receipt of application. |
| 133. | 245RR | Appellate authority not to proceed in certain cases. |
| 134. | 245S | Applicability of advance ruling. |
| 135. | 245T | Advance ruling to be void in certain circumstances |
| 136. | 245U | Powers of the Authority. |
| 137. | 245V | Procedure of Authority |
| 138. | 271BA | Penalty for failure to furnish report under section 92E. |
| 139. | 271C | Penalty for failure to deduct tax at source |
| 140. | 271FAB | Penalty for failure to furnish statement or information or document by an eligible investment fund |
| 141. | 271G | Penalty for failure to furnish information or document under section 92D |
| 142. | 271GA | Penalty for failure to furnish information or document under section 285A |
| 142A | 271GB | Penalty for failure to furnish report or for furnishing inaccurate report in respect of international group as per section 286 |
| 143. | 271-I | Penalty for failure furnish information or furnish inaccurate information under Section 195 |
| 144. | 285 | Submission of statement by a non-resident having liaison office |
| 145. | 285A | Furnishing or information or documents by an Indian concern, through or in which the Indian assets are held by the foreign company or the entity, in certain cases |
| 146 | 286 | Furnishing of report in respect of international group |
[As amended by Finance Act, 2023]
(Republished with Amendment, Source -Income Tax Website)
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