Special provision for computation of total income of non-residents
[Section-213 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 213(1) of Income Tax Act 2025
213(1) No deduction in respect of any expenditure or allowance shall be allowed under any provision of this Act in computing the investment income of a non-resident Indian.
Section 213(2) of Income Tax Act 2025
213(2) In the case of an assessee, being a non-resident Indian, where––
- 213(2)(a) the gross total income consists only of investment income or income by way of long-term capital gains or both then no deduction shall be allowed under Chapter VIII;
- 213(2)(b) the gross total income includes any income referred to in clause (a),––
- (i) the gross total income shall be reduced by such income; and
- (ii) the deductions under Chapter VIII shall be allowed as if the gross total income as so reduced was the gross total income of the assessee.
FAQs on Section 213 of Income Tax Act 2025
What is Section 213 of the Income Tax Act, 2025 about?
Section 213 provides special provisions for computing the total income of non-resident Indians, specifically relating to investment income and long-term capital gains.
Are deductions allowed on investment income for non-resident Indians?
No, as per Section 213(1), no deduction in respect of any expenditure or allowance is allowed under any provision of the Act when computing the investment income of a non-resident Indian.
What happens if the gross total income of a non-resident Indian consists only of investment income and/or long-term capital gains?
If the gross total income includes only investment income or income by way of long-term capital gains or both, then no deduction shall be allowed under Chapter VIII.
Can a non-resident Indian claim deductions under Chapter VIII if their gross total income includes other types of income?
Yes, if their gross total income includes income in addition to investment income or long-term capital gains, then the investment income and/or long-term capital gains are first reduced from the gross total income, and deductions under Chapter VIII are allowed on the remaining income.
What is the purpose of reducing investment income or long-term capital gains from gross total income under Section 213(2)(b)?
The purpose is to ensure that deductions under Chapter VIII are not claimed against investment income or long-term capital gains, which are otherwise ineligible for such deductions.
Is long-term capital gain treated the same as investment income for deduction purposes under Section 213?
Yes, both investment income and long-term capital gains are treated similarly in terms of disallowance of deductions under Section 213.
Does Section 213 apply to all non-residents?
No, it specifically applies to non-resident Indians as defined under the Income Tax Act, 2025.
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