Tax on investment income and long-term capital gains
[Section-214 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
The Income-tax payable, on the total income of an assessee, being a non-resident Indian, 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 |
|---|---|
| Income from investment or income from long-term capital gains of an asset other than a specified asset. | 20 % |
| Income from long-term capital gains on specified asset. | 12.5% |
| Total income as reduced by income referred to against serial numbers 1 and 2. | Income-tax chargeable on such income. |
FAQs on Section 214 of Income Tax Act 2025
Who is covered under Section 214 of the Income Tax Act, 2025?
Section 214 applies specifically to a non-resident Indian whose total income includes investment income or long-term capital gains.
What types of income are subject to special tax rates under this section?
The section applies special tax rates to income from investments and long-term capital gains of assets (both specified and other than specified assets).
What is the tax rate on income from investment or long-term capital gains of assets other than specified assets?
The tax rate is 20% on such income.
What is the tax rate on long-term capital gains from specified assets?
The tax rate is 12.5% on long-term capital gains arising from specified assets.
How is the total tax calculated under Section 214?
It is the sum of:
- 20% on income from investment or long-term capital gains (other than specified assets),
- 12.5% on long-term capital gains from specified assets, and
- Normal tax rate on remaining total income (i.e., total income reduced by the above two types of income).
What is considered a specified asset for the purposes of this section?
The section itself does not define “specified asset”; this term is likely defined elsewhere in the Act or in the accompanying rules or notifications.
Does this section override general tax slab provisions for non-resident Indians?
Yes, for the incomes covered (investment income and long-term capital gains), the section prescribes specific flat tax rates which apply instead of the general slab rates.
From which assessment year is Section 214 applicable?
It is applicable from the assessment year beginning on or after 1st April, 2026.
Can deductions under other sections be claimed against income taxed under Section 214?
Section 214 does not mention any specific allowance for deductions; the applicability of deductions depends on whether the income falls under exclusive provisions and whether such deductions are allowed by the Act for those incomes.
Is rebate or relief under any other section available against tax computed under Section 214?
The section does not specify this; it will depend on whether other sections like relief or rebate provisions are expressly made applicable.
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