close

 CHAPTER III 

INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME

   Incomes not included in total income.

 10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included—

 (1) agricultural income ;

 (2) subject to the provisions of sub-section (2) of section 64, any sum received by an individual as a member of a Hindu undivided family, where such sum has been paid out of the income of the family, or, in the case of any impartible estate, where such sum has been paid out of the income of the estate belonging to the family ;

 (2A) in the case of a person being a partner of a firm which is separately assessed as such, his share in the total income of the firm.

  Explanation.—For the purposes of this clause, the share of a partner in the total income of a firm separately assessed as such shall, notwithstanding anything contained in any other law, be an amount which bears to the total income of the firm the same proportion as the amount of his share in the profits of the firm in accordance with the partnership deed bears to such profits ;]

  (3)  [***]

(4) (i) in the case of a non-resident, any income by way of interest on such securities or bonds as the Central Government may, by notification in the Official Gazette, specify in this behalf, including income by way of premium on the redemption of such bonds :

Provided that the Central Government shall not specify, for the purposes of this sub-clause, such securities or bonds on or after the 1st day of June, 2002;

  (ii) in the case of an individual, any income by way of interest on moneys standing to his credit in a Non-Resident (External) Account in any bank in India in accordance with the Foreign Exchange Management Act, 1999 (42 of 1999), and the rules made thereunder 

Provided that such individual is a person resident outside India as defined in 2clause (w) of  section 2 of the said Act or is a person who has been permitted by the Reserve Bank of India to maintain the aforesaid Account

(4A) [***]

(4B) in the case of an individual, being a citizen of India or a person of Indian origin, who is a non-resident, any income from interest on such savings certificates issued before the 1st day of June, 2002 by the Central Government as that Government may, by notification in the Official Gazette, specify in this behalf :

Provided that the individual has subscribed to such certificates in convertible foreign exchange remitted from a country out- side India in accordance with the provisions of the Foreign Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder.

Explanation.—For the purposes of this clause,—

(a)  a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grandparents, was born in undivided India ;

(b)  "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 ;

14[(4C) any income by way of interest payable to a non-resident, not being      a company, or to a foreign company, by any Indian company or business trust in    respect of monies borrowed from a source outside India by way of issue of rupee      denominated bond, as referred to in clause (ia) of sub-section (2) of section 194LC, during the period beginning from the 17th day of September, 2018 and ending on the 31st day of March, 2019;

 (4D) "any income accrued or arisen to, or received by a specified fund as    a result of transfer of capital asset referred to in clause (viiab) or section 47, on  a recognised stock exchange located in any International Financial Services    Centre and where the consideration for such transaction is paid or payable in     31convertible foreign exchange or as a result of transfer of securities (other than shares in a company resident in India) or any income from securities issued by a non-resident (not being a permanent establishment of a non-resident in India) and where such income otherwise does not accrue or arise in India or any income from a securitisation trust which is chargeable under the head "profits and gains of business or profession", to the extent such income accrued or arisen to, or is received, is attributable to units held by non-resident (not being the permanent establishment of a non-resident in India) computed in the prescribed manner

Explanation:—For the purposes of this clause, the expression—

(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 the rules made thereunder;

(b) "manager" shall have the meaning assigned to it in clause (q) of subregulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and    Exchange Board of India Act, 1992 (15 of 1992);

32'(ba) "permanent establishment" shall have the same meaning assigned to it in clause (iiia) of section 92F;

32(bb) "securities" shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 and shall also include such other securities or instruments as may be notified by the Central Government in the Official Gazette in this behalf;

32(bc) "securitisation trust" shall have the same meaning assigned to it in clause (d) of the Explanation to section 115TCA;';

(c) "specified fund" means a fund established or incorporated in India in  the form of a trust or a company or a limited liability partnership or a body corporate,—

(i) which has been granted a certificate of registration as a Category    III Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012,made under the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(ii) which located in any International Financial Services Centre;

(iii) of which all the units are held by non-residents other than unit held by a sponsor or manager;

(d) "sponsor" shall have the meaning assigned to it in clause (w) of subregulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and    Exchange Board of India Act, 1992 (15 of 1992);

(e) "trust" means a trust established under the Indian Trusts Act, 1882 (2 of 1882) or under any other law for the time being in force;

(f) "unit" means beneficial interest of an investor in the fund and shall include shares or partnership interests;]

 

(5) in the case of an individual, the value of any travel concession or assistance received by, or due to, him,—

 (a)  from his employer for himself and his family, in connection with his proceeding on leave to any place in India ;

 (b) from his employer or former employer for himself and his family, in connection with his proceeding to any place in India after retirement from service or after the termination of his service,     subject to such conditions as may be prescribed (including conditions as to number of journeys and the amount which shall be exempt per head) having regard to the travel concession or assistance granted to the employees of the Central Government :

 Provided that the amount exempt under this clause shall in no case exceed the amount of expenses actually incurred for the purpose of such travel.

 Explanation.—For the purposes of this clause, "family", in relation to an individual, means—

 (i) the spouse and children of the individual ; and

 (ii) the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual;

 (5A) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

 (5B) [Omitted by the Finance Act, 2002, w.e.f. 1-4-2003;]

 (6) in the case of an individual who is not a citizen of India,—

(i)[***]

 (ii) the remuneration received by him as an official, by whatever name called, of an embassy, high commission, legation, commission, consulate or the trade representation of a foreign State, or as a member of the staff of any of these officials, for service in such capacity :

Provided that the remuneration received by him as a trade commissioner or other official representative in India of the Government of a foreign State (not holding office as such in an honorary capacity), or as a member of the staff of any of those officials, shall be exempt only if the remuneration of the corresponding officials or, as the case may be, members of the staff, if any, of the Government resident for similar purposes in the country concerned enjoys a similar exemption in that country :

Provided further that such members of the staff are subjects of the country represented and are not engaged in any business or profession or employment in India otherwise than as members of such staff ;

(iii)  to (v) [Sub-clause (ii) substituted for sub-clauses (ii) to (v) by the Finance Act, 1988, w.e.f. 1-4-1989;]

(vi) the remuneration received by him as an employee of a foreign enterprise for services rendered by him during his stay in India, provided the following conditions are fulfilled—

(a) the foreign enterprise is not engaged in any trade or business in India ;

(b) his stay in India does not exceed in the aggregate a period of ninety days in such previous year ; and

(c) such remuneration is not liable to be deducted from the income of the employer chargeable under this Act ;

(via) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

(vii) [Omitted by the Finance Act, 1993, w.e.f. 1-4-1993;]

(viia) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

(viii) any income chargeable under the head "Salaries" received by or due to any such individual being a non-resident as remuneration for services rendered in connection with his employment on a foreign ship where his total stay in India does not exceed in the aggregate a period of ninety days in the previous year ;

(ix) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

(x) [Omitted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999;]

(xi) the remuneration received by him as an employee of the Government of a fore