**Policy Summary:**
This notification, S.O. 1057(E), issued by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes on March 13, 2020, clarifies the definition of "Foreign Institutional Investor (FII)" under Section 115AD of the Income-tax Act, 1961. The notification specifies that a non-resident "Eligible Foreign Investor" operating in accordance with SEBI circular IMD/HOFP/IC/CIR/P/2017/003 dated January 4, 2017, will be deemed an FII. This applies specifically to securities transactions conducted on recognized stock exchanges within an International Financial Services Centre (IFSC), provided the transaction consideration is paid or payable in foreign currency. The notification also provides definitions for "International Financial Services Centre," "recognized stock exchange," and "securities" by referencing relevant sections of the Special Economic Zones Act, 2005, the Income-tax Act, 1961, and the Securities Contracts Regulation Act, 1956, respectively. The notification number is 17/2020 (F. No. 173/10/2014-ITA-I) and was signed by Gulzar Ahmad Wani, Under Secretary.
Key Entities Referenced
Ministry of Finance: The ministry responsible for financial matters in the Indian government.
Department of Revenue: A department under the Ministry of Finance responsible for tax collection and administration.
Central Board of Direct Taxes: A body under the Department of Revenue responsible for direct tax policies and administration.
Income-tax Act, 1961: An Indian law governing income tax.
Eligible Foreign Investor: A non-resident investor as defined in the context of the notification.
Securities and Exchange Board of India: The regulator of the securities market in India.
International Financial Services Centre IFSC: A zone within India that allows for financial services to be provided to non-residents and residents, often in foreign currency.
Special Economic Zones Act, 2005: An Indian law providing for the establishment, development, and management of special economic zones.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. NO. D. L.-33004/99
सी.जी.-डी.एलx.x-xअG.I-D1H4x0x3x2 020-218672
CG-DL-xExx-G1I4D0E3x2x0x2 0-218672
असाधारण
EXTRAORDINARY
भाग II—खण् ड 3—उप-खण्ड (ii)
PART II—Section 3—Sub-section (ii)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 950] नई दिल्ली, िक्रु िार, माचड 13 2020/फाल्ग नु 23, 1941
No. 950] NEW DELHI, FRIDAY, MARCH 13, 2020/PHALGUNA 23, 1941
जित्त मत्रं ालय
(रािस्ट्ि जिभाग)
(केंद्रीय प्रत्यक्ष कर बोडड)
अजधसचू ना
नई दिल् ली, 13 माचड, 2020
का.आ. 1057(अ).—आयकर अजधजनयम, 1961 (1961 का 43) की धारा 115कघ के स्ट्पष्टीकरण के खण्ड (क)
द्वारा प्रित्त िजियों का प्रयोग करते हुए, केंद्र सरकार एतद्द्वारा जिजनर्िष्टड करती ह ै दक एक अजनिासी िो पात्र जििेिी
जनिेिक ह,ै िोदक भारतीय प्रजतभूजत एि ं जिजनमय बोडड के पररपत्र आईएमडी/एचओ/एफपीआईसी/सीआईआर/पी/
2017/003 दिनांक 04 िनिरी, 2017 के अनुसार काय ड करता ह,ै को दकसी भी अंतराष्ट्रड ीय जित्तीय सेिा केंद्र
(आईएफएससी) म ें जस्ट्ित मान्यताप्राप्त स्ट्टॉक एक्सचेंि पर िहा ं ऐस े संव्यिहार के जलए प्रजतफल जििेिी मुद्रा म ें संित्त दकया
िाता ह ै अििा संिेय होता ह,ै दकए गए प्रजतभूजत म ें संव्यिहार के प्रयोिनाि ड हते ु जििेिी सस्ट्ं िागत जनिेिक (एफआईआई)
के रूप म ें माना िाएगा।
स्ट्पष्टीकरण:- इस अजधसूचना के प्रयोिन हते -ु
(क) ‘‘अंतराडष्ट्रीय जित्तीय सेिा केंद्र’’ का अिड िही होगा िोदक, जििेष आर्िडक िोन अजधजनयम, 2005 (2005 का
28) की धारा 2 के खंड (ि) म ेंजनर्िष्टड दकया गया ह।ै
(ख) ‘‘मान्यताप्राप्त स्ट्टॉक एक्सचेंि’’ का िही अि ड होगा िोदक आयकर अजधजनयम, 1961 की धारा 43 के खंड (5)
के स्ट्पष्टीकरण 1 के खंड (ii) म ें जनर्िष्टड दकया गया ह।ै
1401 GI/2020 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
(ग) अजभव्यजि ‘‘प्रजतभूजत’’ का िही अिड होगा िोदक प्रजतभूजत संजििा (जिजनयमन) अजधजनयम, 1956 (1956 का
42) की धारा 2 के खंड (ि) म ेंजनर्िष्टड दकया गया ह।ै
[अजधसूचना स.ं 17/2020 /फा. स.ं 173/10/2014-आईटीए-I]
गुलजार अहमि िानी, अिर सजचि
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 13th March, 2020
S.O. 1057(E).—In exercise of the powers conferred by clause (a) of the Explanation to section
115 AD of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies that a non-
resident being an Eligible Foreign Investor which operates in accordance with the Securities and
Exchange Board of India, circular IMD/HO/FPIC/CIR/P/2017/003 dated 04th January, 2017, shall be
deemed as Foreign Institutional Investor (FII) for the purposes of transactions in securities made on a
recognised stock exchange located in any International Financial Services Centre (IFSC), where the
consideration for such transaction is paid or payable in foreign currency.
Explanation. - for the purpose of this notification, -
(a) “International Financial Services Centre” shall have the same meaning as assigned to it in
clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);
(b) “recognised stock exchange” shall have the same meaning as assigned to it in clause (ii) of
Explanation 1 to clause (5) of section 43 of the Income-tax Act, 1961;
(c) the expression “securities” shall have the same meaning as assigned to it in clause (h) of
section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956)
[Notification No. 17/2020/ F. No. 173/10/2014-ITA-I]
GULZAR AHMAD WANI, Under Secy.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.