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What is Securitisation trust to be assessee in default? What is Tax on income in certain cases? Section 115TC and 115U of Income Tax Act 1961

Securitisation trust to be assessee in default and Tax on income in certain cases are defined under sections 115TC and 115U of Income Tax Act 1961. Provisions under these Sections are :

Section 115TC of Income Tax Act "Securitisation trust to be assessee in default"

Section 115TC. If any person responsible for making payment of the income distributed by the securitisation trust and the securitisation trust does not pay tax, as referred to in sub-section (1) of section 115TA, then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply.

Explanation.-For the purposes of this Chapter,-

(a) "investor" means a person who is holder of any securitised debt instrument or securities issued by the securitisation trust;

(b) "securities" means debt securities issued by a Special Purpose Vehicle as referred to in the guidelines on securitisation of standard assets issued by the Reserve Bank of India;

 

(c) "securitised debt instrument" shall have the same meaning as assigned to it in clause (s) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(d) "securitisation trust" means a trust, being a-

(i) "special purpose distinct entity" as defined in clause (u) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and regulated under the said regulations; or

(ii) "Special Purpose Vehicle" as defined in, and regulated by, the guidelines on securitisation of standard assets issued by the Reserve Bank of India, which fulfils such conditions, as may be prescribed.

Section 115U of Income Tax Act "Tax on income in certain cases"

Section 115U. (1) Notwithstanding anything contained in any other provisions of this Act, any income accruing or arising to or received by a person out of investments made in a venture capital company or venture capital fund shall be chargeable to income-tax in the same manner as if it were the income accruing or arising to or received by such person had he made investments directly in the venture capital undertaking.

(2) The person responsible for crediting or making payment of the income on behalf of a venture capital company or a venture capital fund and the venture capital company or venture capital fund shall furnish, within such time as may be prescribed, to the person who is liable to tax in respect of such income and to the prescribed income-tax authority, a statement in the prescribed form94 and verified in the prescribed manner, giving details of the nature of the income paid or credited during the previous year and such other relevant details as may be prescribed.

(3) The income paid or credited by the venture capital company and the venture capital fund shall be deemed to be of the same nature and in the same proportion in the hands of the person referred to in sub-section (1) as it had been received by, or had accrued or arisen to, the venture capital company or the venture capital fund, as the case may be, during the previous year.

(4) The provisions of Chapter XII-D or Chapter XII-E or Chapter XVII-B shall not apply to the income paid by a venture capital company or venture capital fund under this Chapter.

(5) The income accruing or arising to or received by the venture capital company or venture capital fund, during a previous year, from investments made in venture capital undertaking if not paid or credited to the person referred to in sub-section (1), shall be deemed to have been credited to the account of the said person on the last day of the previous year in the same proportion in which such person would have been entitled to receive the income had it been paid in the previous year.

Following sub-section (6) shall be inserted after sub-section (5) of section 115U by the Finance Act, 2015, w.e.f. 1-4-2016 :

(6) Nothing contained in this Chapter shall apply in respect of any income, of a previous year relevant to the assessment year beginning on or after the 1st day of April, 2016, accruing or arising to, or received by, a person from investments made in a venture capital company or venture capital fund, being an investment fund specified in clause (a) of the Explanation 1 to section 115UB.

Explanation 1.-For the purposes of this Chapter, "venture capital company", "venture capital fund" and "venture capital undertaking" shall have the meanings respectively assigned to them in clause (23FB) of section 10.

Explanation 2.-For the removal of doubts, it is hereby declared that any income which has been included in total income of the person referred to in sub-section (1) in a previous year, on account of it having accrued or arisen in the said previous year, shall not be included in the total income of such person in the previous year in which such income is actually paid to him by the venture capital company or the venture capital fund.

Income Tax Act 1961

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What is Interest payable for non-payment of tax? What is the meaning of Unit Trust of India or Mutual Fund to be an assessee in default? Section 115S and 115T of Income Tax Act 1961

What is Tax on distributed income to investors? What is Interest payable for non-payment of tax? Section 115TA and 115TB of Income Tax Act 1961

What is Securitisation trust to be assessee in default? What is Tax on income in certain cases? Section 115TC and 115U of Income Tax Act 1961

What is Tax on income of unit holder and business trust? What  is Tax on income of investment fund and its unit holders? Section 115UA and 115UB of Income Tax Act 1961

What are Definitions? What is Relevant shipping income? Section 115V and 115V I of Income Tax Act 1961

What is Exclusion from provisions of section 115JB? What is Computation of profits and gains from the business of operating qualifying ships? Section 115VO and 115VA of Income Tax Act 1961

What is Operating ships? What is Qualifying company? Section 115VB and 115VC of Income Tax Act 1961

What is Qualifying ship? What is Manner of computation of income under tonnage tax scheme? Section 115VD and 115VE of Income Tax Act 1961

What is Tonnage income? What is Computation of tonnage income? Section 115VF and 115VG of Income Tax Act 1961

What is Calculation in case of joint operation, etc? What is Treatment of common costs? Section 115VH and 115VJ of Income Tax Act 1961

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