Section 115AD of ITA, 1961 : Section 115Ad: Tax On Income Of Foreign Institutional Investors From Securities Or Capital Gains Arising From Their Transfer

Explanation using Example

Imagine a Foreign Institutional Investor (FII) from Germany, named 'Global Invest GmbH', has invested in Indian securities. During the financial year, they receive income from two sources:

• Interest income from corporate bonds amounting to INR 10 million.
• Short-term capital gains from the sale of shares amounting to INR 5 million.

Under Section 115AD of the Income-tax Act, 1961, the tax implications for Global Invest GmbH would be:

• The interest income of INR 10 million would be taxed at a rate of 20%, but since the interest is from bonds referred to in section 194LD, it is taxed at ...

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