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section 115 D

manohar (C.A.) (25 Points)

07 July 2011

As per second proviso to section 48- Indexation shall be allowed in the case of non resident on long term capital gain other than reffered in first proviso to section 48.

But as per section 115 D - Chapter VI-A and second proviso to section 48 shall not be allowed to non resident indian on Investment Income & Long Term Capital Gain.

1. Why there is contradiction ?

2. Whether indexation shall be allowed or not to non resident on Gain on sale of property ?

3. Whether Chapter XII-A is applicable on specified securities or to all investments?

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1 Replies

Saleem Abdul (CA) (397 Points)
Replied 30 January 2014

Hi Manohar

Answer to 1: There is no contradiction between the provisions of proviso 2 to S.48 AND S.115D(2)(a).

S.115D(2)(a) clearly says that

Where in the case of an assessee, being a non-resident Indian,—

the gross total income consists only of investment income or income by way of long-term capital gains or both, no deduction shall be allowed to the assessee under Chapter VI-A and nothing contained in the provisions of the second proviso to section 48 shall apply to income chargeable under the head "Capital gains".

Here it seems that if the assessee is having ANY OTHER INCOME such as Salary or income under the head other sources Second proviso to Sec.48 can be applied even to the above mentioned Long Term Capital Gains.

Answer to 2: Indexation shall be allowed to the NRI on gain on sale of property if he is also having any other income such as salary or house property income or income under the head other sources or PGBP.

Answer to 3: Chapter XIIA has reference of Specified asset. Still it applies to all investments wherever it seems appropriate.