Section 196C of Income Tax Act "Income from foreign currency bonds or shares of Indian company"
196C. Where any income by way of interest or dividends in
respect of bonds or Global Depository Receipts referred to
in section 115AC or by way of long-term capital gains
arising from the transfer of such bonds or Global Depository
Receipts is payable to a non-resident, the person
responsible for making the payment shall, at the time of
credit of such income to the account of the payee or at the
time of payment thereof 76[by any mode], whichever is
earlier, deduct income-tax thereon at the rate of ten per
cent.
77[***]
196D. (1) Where any income in respect of securities referred
to in clause (a) of sub-section (1) of section 115AD, not
being income by way of interest referred to in section
194LD, is payable to a Foreign Institutional Investor, the
person responsible for making the payment shall, at the time
of credit of such income to the account of the payee or at
the time of payment thereof 78[by any mode], whichever is
earlier, deduct income-tax thereon at the rate of twenty per
cent.
79[***]
79a[(1A) Where any income in respect of securities referred
to in clause (a) of sub-section (1) of section 115AD, not
being income by way of interest referred to in section
194LD, is payable to a specified fund [referred to in clause
(c) of the Explanation to clause (4D) of section 10], the
person responsible for making the payment shall, at the time
of credit of such income to the account of the payee, or at
the time of payment thereof by any mode, whichever is
earlier, deduct the income-tax thereon at the rate of ten
per cent:
Provided that no deduction shall be made in respect of an
income exempt under clause (4D) of section 10.]
(2) No deduction of tax shall be made from any income, by
way of capital gains arising from the transfer of securities
referred to in section 115AD, payable to a Foreign
Institutional Investor.