Tax on income from transfer of carbon credits.

1. (1) Where the total income of an assessee includes any income by way of transfer of carbon credits, the income-tax payable shall be the aggregate of—
   • (a) the amount of income-tax calculated on the income by way of transfer of carbon credits, at the rate of ten per cent; and
   • (b) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a).
2. (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) of sub-section (1). Explanation.—For the purposes of this section, “carbon credit” in respect of one unit shall mean reduction of one tonne of carbon dioxide emissions or emissions of its equivalent gases which is validated by the United Nations Framework on Climate Change and which can be traded in market at its prevailing market price.] 2[CHAPTER XII-A SPECIAL PROVISIONS RELATING TO CERTAIN INCOMES OF NON-RESIDENTS 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 3[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 4[income derived other than dividends referred to in section 115-O] from a foreign exchange asset;
   • (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.

¹ Ins. by Act 7 of 2017, s. 45 (w.e.f. 1-4-2018).

² Ins. by Act 11 of 1983, s. 36 (w.e.f. 1-6-1983).

³ Subs. by Act 17 of 2013, s. 4, for “The Foreign Exchange Regulation Act, 1973 (46 of 1973)” (w.e.f. 1-4-2013).

⁴ Subs. by Act 32 of 2003, s. 54, for “income-derive” (w.e.f. 1-4-2004).