Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer
[As per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 209(1) of Income Tax Act 2025
(1) The income -tax payable, on the total income of an assessee, being a non- resident, which includes income specified in column B of the Table below, shall be the aggregate of the amounts mentioned in column C thereof.
Table
| Income | Income-tax payable |
|---|---|
| From interest on–– (a) bonds of an Indian company issued in accordance with such scheme as notified by the Central Government; or (b) bonds of a public sector company sold by the Government, and purchased in foreign currency. | 10 % |
| From dividends on Global Depository Receipts— (a) issued as per such scheme as the Central Government may, notified, against the initial issue of shares of an Indian company and purchased in foreign currency through an approved intermediary; or (b) 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 (c) issued or re-issued in accordance with a scheme notified by the Central Government, against the existing shares of an Indian company purchased in foreign currency through an approved intermediary. | 10 % |
| Long-term capital gains arising from the transfer of bonds referred to against serial number 1 or Global Depository Receipts referred to against serial number 2. | 12.5% |
| Total income as reduced by income referred to against serial numbers 1 to 3. | Income-tax chargeable on such income. |
Section 209(2) of Income Tax Act 2025
(2) Where the gross total income of the non-resident—
(a) consists only of income by way of interest or dividends in respect of––
(i) bonds referred to in sub-section (1) (Table: Sl. No. 1); or sub-section (1); or
(ii) Global Depository Receipts referred to in sub-section (1) (Table: Sl. No. 2), no deduction shall be allowed under sections 26 to 61 or section 93(1)(a) or 93(1)(e) or under Chapter VIII;
(b) includes any income referred to in sub-section (1) (Table: Sl. No. 1) to (Table: Sl. No. 3),––
(i) the gross total income shall be reduced by the such income; and
(ii) the deduction under Chapter VIII shall be allowed as if the gross total income so reduced, were the gross total income of the assessee.
Section 209(3) of Income Tax Act 2025
(3) The provisions of section 72(6) shall not apply for 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 sub-section (1) (Table: Sl. No. 3).
Section 209(4) of Income Tax Act 2025
(4) It shall not be necessary for a non-resident to furnish a return of his income under section 263(1), if—
(a) his total income during the tax year consisted only of income referred to in sub-sections (1) (Table: Sl. No. 1) and (Table: Sl. No. 2); and
(b) the tax deductible at source under the provisions of Chapter XIX-B has been deducted from such income.
Section 209(5) of Income Tax Act 2025
(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, as per the provisions of sub-section (1), the provisions of that sub-section shall apply to such Global Depository Receipts or bonds.
Section 209(6) of Income Tax Act 2025
(6) In this section,––
(a) “approved intermediary” means an intermediary which is approved as per a scheme notified by the Central Government; and
(b) “Global Depository Receipts” shall have the meaning assigned to it in section 190(4)(a).