Section 115C of Income Tax Act for AY 2023-24

Amended and updated notes on section 115C (Definitions) of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962.

Amended and updated notes on section 115C of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Definitions.

Chapter XII-A (Sections 115C to 115-I) of the Income Tax Act 1961 deals with the provisions related to special provisions relating to certain incomes of non-residents. Section 115C of IT Act 1961-2023 provides for Definitions.

Recently, we have discussed in detail section 115BBG (Tax on income from transfer of carbon credits) of IT Act 1961. Today, we learn the provisions of section 115C of Income-tax Act 1961. The amended provision of section 115C is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 115C of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962, regulations, notifications, circulars, orders and Press Release by CBDT, Income Tax Department and the Ministry of Law and Justice, Government of India.

Section-115C: Definitions

In this Chapter, unless the context otherwise requires,—

(a) “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder;

(b) “foreign exchange asset” means any specified asset which the assessee has acquired or purchased with, or subscribed to in, convertible foreign exchange;

(c) “investment income” means any income derived other than dividends referred to in section 115-O from a foreign exchange asset; [Strikethrough texts has been omitted w.e.f. 01.04.2021 by the Finance Act 2020]

(d) “long-term capital gains” means income chargeable under the head “Capital gains” relating to a capital asset, being a foreign exchange asset which is not a short-term capital asset;

(e) “non-resident Indian” means an individual, being a citizen of India or a person of Indian origin who is not a “resident”.

Explanation: A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India;

(f) “specified asset” means any of the following assets, namely :—

  • (i) shares in an Indian company;
  • (ii) debentures issued by an Indian company which is not a private company as defined in the Companies Act, 1956 (1 of 1956);
  • (iii) deposits with an Indian company which is not a private company as defined in the Companies Act, 1956 (1 of 1956);
  • (iv) any security of the Central Government as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944);
  • (v) such other assets as the Central Government may specify in this behalf by notification in the Official Gazette.


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