Section 115AB of Income Tax Act "Tax on income from units purchased in foreign currency or capital gains arising from their transfer"
115AB. (1) Where the total income of an assessee, being
an overseas financial organisation (hereinafter referred to
as Offshore Fund) includes-
(a) income received in respect of units purchased in foreign
currency; or
(b) income by way of long-term capital gains arising from
the transfer of units purchased in foreign currency,
the income-tax payable shall be the aggregate of-
(i) the amount of income-tax calculated on the income in
respect of units referred to in clause (a), if any, included
in the total income, at the rate of ten per cent;
(ii) the amount of income-tax calculated on the income by
way of long-term capital gains referred to in clause (b), if
any, included in the total income, at the rate of ten per
cent; and
(iii) the amount of income-tax with which the Offshore Fund
would have been chargeable had its total income been reduced
by the amount of income referred to in clause (a) and clause
(b).
(2) Where the gross total income of the Offshore Fund,-
(a) consists only of income from units or income by way of
long-term capital gains arising from the transfer of units,
or both, no deduction shall be allowed to the assessee under
sections 28 to 44C or clause (i) or clause (iii) of section
57 or under Chapter VI-A and nothing contained in the
provisions of the second proviso to section 48 shall apply
to income referred to in clause (b) of sub-section (1);
(b) includes any income referred to in clause (a), the gross
total income shall be reduced by the amount of such income
and the deduction under Chapter VI-A shall be allowed as if
the gross total income as so reduced were the gross total
income of the assessee.
Explanation.-For the purposes of this section,-
(a) "overseas financial organisation" means any fund,
institution, association or body, whether incorporated or
not, established under the laws of a country outside India,
which has entered into an arrangement for investment in
India with any public sector bank or public financial
institution or a mutual fund specified under clause (23D) of
section 10 and such arrangement is approved by the
Securities and Exchange Board of India, established under
the Securities and Exchange Board of India Act, 1992 (15 of
1992), for this purpose;
(b) "unit" means unit of a mutual fund specified under
clause (23D) of section 10 or of the Unit Trust of India;
(c) "foreign currency" shall have the meaning as in the
Foreign Exchange Management Act, 1999 (42 of 1999);
(d) "public sector bank" shall have the meaning assigned to
it in clause (23D) of section 10;
(e) "public financial institution" shall have the meaning
assigned to it in section 4A of the Companies Act, 1956 (1
of 1956);
(f) "Unit Trust of India" means the Unit Trust of India
established under the Unit Trust of India Act, 1963 (52 of
1963).