[Determination of income of a specified fund attributable to units held by non-residents under sub-section (1A) of section 115AD.
(1) For the purposes of sub-section (1A) of section 115AD, the income of a specified fund by way of short-term or long-term capital gains, referred to in clause (b) of sub-section (1) of section 115AD, attributable to the units held by non-resident (not being the permanent establishment of a non-resident in India) shall be calculated in accordance with the following formula, namely:—
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
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 sub-section (1A) of section 115AD, the income of a specified fund by way of income received in respect of securities, referred to in clause (a) of sub-section (1) of section 115AD, attributable to the units held by non-resident (not being the permanent establishment of a non-resident in India) shall be calculated in accordance with the following formula, namely:—
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
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. 10-IH electronically under digital signature on or before the due date, which is duly verified in the manner indicated therein.
[(3A) The income of a specified fund referred to in clause (a) and clause (b) of sub-section (1) of section 115AD, attributable to the units held by a non-resident (not being the permanent establishment of a non-resident in India), shall not be eligible for tax rates specified in section 115AD unless it furnishes the annual statement of income eligible for concessional taxation in Form No. 10-IH in accordance with the provision of sub-rule (3).]
(4) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall specify the procedure for filing of the Form No. 10-IH and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the statements so furnished under this rule.
Explanation.—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 clause (iiia) of section 92F;
(c) "securities" shall have the same meaning as assigned to it in clause (bb) of the Explanation to clause (4D) of section 10;
(d) "due date" shall have the same meaning as assigned to it in the Explanation 2 to sub-section (1) of section 139;
(e) "specified fund" shall have the same meaning as assigned to it in sub-clause (i) of clause (c) of the Explanation to clause (4D) of section 10; and
(f) "unit" shall have the same meaning as assigned to it in clause (f) of Explanation to clause (4D) of section 10.]