Income Tax Bill 2025: Key clauses for non-resident Indians & Tax Rates

The Income Tax Bill 2025 has several aspects to be considered by the Non-Resident Indians as Clauses replace Sections.

The Income-tax Bill, 2025 has been tabled in Parliament, marking a significant step toward simplifying the language and structure of the Income-tax Act, 1961. No major tax policy changes and no modifications of tax rates have been made in the Income-tax Bill, 2025. Overall, there will be 23 chapters instead of 47, and there will be 536 clauses in place of 819 sections.

Income Tax Bill -2025

The Income Tax Bill 2025 has several aspects to be considered by the Non-Resident Indians (NRIs) as Clauses replace Sections. A non-resident Indian means an individual, who is not a resident and is (i) a citizen of India; or (ii) a person of Indian origin. Here are some key Clauses for NRI’s to take note of.

Here’s a clause-wise table summarizing the information you provided:

Clause No.	Provision Summary
Clause 5	Defines the scope of total income for residents and non-residents in India.
Clause 60	Manner for computation of deduction of head office expenditure for non-residents.
Clause 61	Special provision for presumptive income computation for certain non-resident business activities.
Clause 174	Avoidance of income tax by transactions transferring income to non-residents; income deemed as such.
Clause 207	Special tax rates for non-residents on certain income types (dividends, interest, units, royalties, FTS).
Clause 209	Special tax rates for non-residents on income from Global Depository Receipts (interest, dividends, transfers).
Clause 211	Special tax rates on income of non-resident sportsmen or sports associations earned in India.
Clause 213	Method for computing taxable income for non-resident Indians.
Clause 214	Special tax rates on investment income and long-term capital gains of non-resident Indians.
Clause 215	Non-taxation of long-term capital gains for non-resident Indians if specific investments are made.
Clause 216	Exemption from filing income tax returns for non-resident Indians under certain conditions.
Clause 217	Optional grandfathering of investment income taxation when a non-resident Indian becomes a resident later.
Clause 306	Provision for agents acting on behalf of non-residents.
Clause 422	Recovery of tax arrears from non-residents via their assets.
Clause 505	Submission of statements by non-residents with liaison offices in India under FEMA guidelines.

Tax Rates for Non-Residents:

Income Type	Tax Rate
Dividend	20%
Dividend from a unit in an International Financial Services Centre	10%
Interest from Government/Indian concern on foreign currency borrowings	20%
Interest from infrastructure debt funds	5%
Income from units purchased in foreign currency of specified Mutual Funds (Schedule VII)	20%