21[Income in respect
of units of non-residents.22
196A. (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 :
23[Provided that
no deduction shall be made under this section from any such income credited or
paid on or after the 1st day of April, 2003.]
(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 1973), and
the rules made thereunder.
Explanation.—For the purposes of this section—
(a) 24“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.]
