CBDT Notifies Non-resident eligible foreign investor as Foreign Institutional Investor under section 115 AD of Income Tax Act

The Central Board of Direct Taxes in its notification dated 13th March 2020 has specified that a non-resident being an Eligible Foreign Investor which operates in accordance with a Securities and Exchange Board of India (SEBI) circular dated 4th January 2017 shall be deemed as Foreign Institutional Investor for the purposes of transactions in securities made on a recognized stock exchange located in any International Financial Services Centre (IFSC), where the consideration for such transaction is paid or payable in foreign currency.

Section 115AD deals with the tax on the income of Foreign Institutional Investors from securities or capital gains arising from their transfer. It provides for a special rate of tax on dividend income at 20 %.

Click here to read the Notification.