Section 115E of Income Tax Act "Tax on investment income and long-term capital gains"
115E. Where the total income of an assessee, being a
non-resident Indian, includes-
(a) any income from investment or income from long-term
capital gains of an asset other than a specified asset;
(b) income by way of long-term capital gains,
the tax payable by him shall be the aggregate of-
(i) the amount of income-tax calculated on the income in
respect of investment income referred to in clause (a), if
any, included in the total income, at the rate of twenty 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 he would have been
chargeable had his total income been reduced by the amount
of income referred to in clauses (a) and (b).
115F. (1) Where, in the case of an assessee being a
non-resident Indian, any long- term capital gains arise from
the transfer of a foreign exchange asset (the asset so
transferred being hereafter in this section referred to as
the original asset), and the assessee has, within a period
of six months after the date of such transfer, invested the
whole or any part of the net consideration in any specified
asset, or in any savings certificates referred to in clause
(4B) of section 10 (such specified asset, or such savings
certificates being hereafter in this section referred to as
the new asset), the capital gain shall be dealt with in
accordance with the following provisions of this section,
that is to say,-
(a) if the cost of the new asset is not less than the net
consideration in respect of the original asset, the whole of
such capital gain shall not be charged under section 45;
(b) if the cost of the new asset is less than the net
consideration in respect of the original asset, so much of
the capital gain as bears to the whole of the capital gain
the same proportion as the cost of acquisition of the new
asset bears to the net consideration shall not be charged
under section 45.
Explanation.-For the purposes of this sub-section,-
(i) "cost", in relation to any new asset, being a deposit
referred to in sub-clause (iii), or specified under
sub-clause (v), of clause (f) of section 115C, means the
amount of such deposit;
(ii) "net consideration", in relation to the transfer of the
original asset, means the full value of the consideration
received or accruing as a result of the transfer of such
asset as reduced by any expenditure incurred wholly and
exclusively in connection with such transfer.
(2) Where the new asset is transferred or converted
(otherwise than by transfer) into money, within a period of
three years from the date of its acquisition, the amount of
capital gain arising from the transfer of the original asset
not charged under section 45 on the basis of the cost of
such new asset as provided in clause (a) or, as the case may
be, clause (b), of sub-section (1) shall be deemed to be
income chargeable under the head "Capital gains" relating to
capital assets other than short-term capital assets of the
previous year in which the new asset is transferred or
converted (otherwise than by transfer) into money.