Benefit to be available in certain cases even after assessee becomes resident
[Section-217 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 217(1) of Income Tax Act 2025
217(1) Where a non-resident Indian in any tax year,––
- (a)becomes assessable as a resident in India in a subsequent tax year; and
- (b)furnishes a declaration in writing to the Assessing Officer alongwith his return of income under section 263 for the tax year for which he is so assessable, to the effect that provisions of sections 212 to 218 shall continue to apply to him in relation to the investment income derived from any foreign exchange asset referred to in section 212(e) other than a share in an Indian company,
then the provisions of this Chapter shall continue to apply in relation to such income until the transfer or conversion (otherwise than by transfer) of such assets into money.
FAQs on Section 217 of Income Tax Act 2025
Who is eligible for the benefit under Section 217(1)?
A non-resident Indian who becomes a resident in a subsequent tax year and files a declaration with their return of income is eligible.
What type of income continues to get the benefit under this section?
The benefit applies only to investment income derived from any foreign exchange asset, excluding shares in an Indian company.
What declaration is required to avail the benefit under Section 217(1)?
The assessee must submit a written declaration to the Assessing Officer along with their return of income under Section 263, stating that the provisions of Sections 212 to 218 shall continue to apply.
Is this benefit automatic upon becoming a resident?
No, the benefit is not automatic. The declaration must be furnished in the specified manner to the Assessing Officer.
Until when does the benefit under Section 217(1) continue?
The benefit continues until the foreign exchange asset is either transferred or converted into money (other than by transfer).
Can the benefit under Section 217(1) be claimed for shares in an Indian company?
No, the benefit specifically excludes shares in an Indian company.
Which sections continue to apply under this provision?
Sections 212 to 218 of the Income Tax Act, 2025, continue to apply in relation to the qualifying investment income.
What happens if the foreign exchange asset is sold or converted into money?
The benefit ceases once the asset is transferred or otherwise converted into money.
Is it necessary to become a resident in India to claim this benefit?
Yes, the individual must become assessable as a resident in a later tax year to avail this continuation benefit.
What is the role of the Assessing Officer under Section 217(1)?
The Assessing Officer receives and processes the declaration made by the assessee and ensures compliance with the provision.
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