Determination of income of a specified fund attributable to units held by non-residents under section 210(2)

Determination of income of a specified fund attributable to units held by non-residents under section 210(2).

140. (1) For the purposes of section 210(2), the income of a specified fund by way of short-term or long-term capital gains, referred to in section 210(1) [Table: Sl. Nos. 2 to 5], that is attributable to the units held by a non-resident (other than the permanent establishment of a non-resident in India), shall be calculated using the following formula:—

A = B × C

Where,—

A = income attributable to the units held by non-resident (not being the permanent establishment of a non-resident in India);

B = income arising from transfer of the security; and

C = ratio of the aggregate of daily "assets under management" of the specified fund held by non-resident unit holders (not being the permanent establishment of a non-resident in India) to the aggregate of daily total "assets under management" of the specified fund, from the date of acquisition of the security to the date of transfer of such security.

(2) For the purposes of section 210(2), the income of a specified fund by way of income received in respect of securities, referred to in section 210(1) [Table: Sl. No. 1], that is attributable to the units held by a non-resident (other than the permanent establishment of a non-resident in India) shall be calculated using the following formula:—

X = Y × Z

Where,—

X = income attributable to the units held by non-resident (not being the permanent establishment of a non-resident in India);

Y = income received in respect of securities; and

Z = ratio of the "assets under management" in the specified fund held by non-resident unit holders (not being the permanent establishment of a non-resident in India) to the total "asset under management" of the specified fund, as on the date of receipt of such income.

(3) The specified fund shall furnish an annual statement of income eligible for concessional taxation in Form No. 69, on or before the due date specified under section 263(1)(c).

(4) The income of a specified fund referred to in section 210(1), attributable to the units held by a non-resident (other than the permanent establishment of a non-resident in India), shall not be eligible for tax rates specified in section 210 unless such fund complies with sub-rule (3).

(5) For the purpose of this rule, the expressions,—

(a) "assets under management" means the closing balance of the value of assets or investments of the specified fund as on a particular date;

(b) "permanent establishment" shall have the same meaning as assigned to it in section 173(c);

(c) "securities" shall have the meaning assigned to it in Schedule VI [Note 1(e)] to the Act;

(d) "specified fund" shall have the meaning assigned to it in Schedule VI [Note 1(g)(i)] to the Act; and

(e) "units" shall have the meaning assigned to it in Schedule VI [Note 1(j)] to the Act.