Notification No. 17/2020-Income Tax, Dated: 13.03.2020

Last updated: 16 March 2020

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This notification specifies that certain non-resident entities, operating in line with SEBI circulars, will be considered Foreign Institutional Investors (FIIs). This applies specifically to transactions involving securities on a recognised stock exchange within an International Financial Services Centre (IFSC), provided the payment is made in foreign currency. The notification clarifies definitions for IFSC, recognised stock exchange, and securities.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION No. 17/2020-Income Tax

New Delhi, the 13th March, 2020

S.O. 1057(E).-In exercise of the powers conferred by clause (a) of the Explanation to section 115AD 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 04^th 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.

FAQ :

A non-resident entity operating in accordance with the Securities and Exchange Board of India circular IMD/HO/FPIC/CIR/P/2017/003 dated 04th January, 2017, is deemed an FII for specific transactions.

This notification applies to transactions in securities made on a recognised stock exchange located in any International Financial Services Centre (IFSC).

The consideration for such transactions must be paid or payable in foreign currency.

An IFSC has the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005.

The expression 'securities' has the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956.

Notification No : 17/2020-Income Tax

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