Substitution of new section for section 196A

Section 37 of the Finance Act, 1995 deals with substitution of new section for section 196A. Substitution of new section for section 196A.

Substitution of new section for section 196A.

37. For section 196A of the Income-tax Act, the following section shall be substituted with effect from the 1st day of July, 1995, namely:—

'196A. Income in respect of units of non-residents.—(1) Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any income in respect of units of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of twenty per cent.

(2) Notwithstanding anything contained in sub-section (1), no deduction of tax shall be made from any income payable in respect of units of the Unit Trust of India to a non-resident Indian or a non-resident Hindu undivided family, where the units have been acquired from the Unit Trust of India out of the funds in a Non-resident (External) Account maintained with any bank in India or by remittance of funds in foreign currency, in accordance, in either case, with the provisions of the Foreign Exchange Regulation Act, 1973 (46 of l973), and the rules made there under.

Explanation.—For the purposes of this section,—

(a) "foreign currency" shall have the meaning assigned to it in the. Foreign Exchange Regulation Act, 1973 ( 46 of 1973);

(b) "non-resident Indian" shall have the meaning assigned to it in clause (e) of section 115C;

(c) "Unit Trust of India" means the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963);

(d) where any income as aforesaid is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.'.

[Finance Act, 1995]

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Section 37, The Finance Act, 1995 (Act 22 of 1995).