Section 115H of Income Tax Act: Benefit under Chapter to be available in certain cases even after the assessee becomes resident.


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Analysis of Section 115H of the Income Tax Act 1961:

This section applies to the assessee who was NRI in the previous year and becomes an Indian resident in the current Financial Year. An assessee has to file a declaration to the Assessing Officer along with his Income Tax Return for the current financial year so that provisions of this chapter apply to him till his investments are transferred into money value.

Following conditions are stipulated under Section 115H:

  • Assessee needs to file a declaration and his income tax return for the financial year in which he becomes assessable as a resident of India.
  • Benefits under this section will apply only to the income from foreign assets.
  • Benefits of concessional levy under this section can be availed until and unless the asset is converted into money and it retains its foreign exchange nature.
  • The benefits under this section are not applicable to dividend income.

Extract From Act:Section 115H of the Income Tax Act 1961:

Where a person, who is a non-resident Indian in any previous year, becomes assessable as resident in India in respect of the total income of any subsequent year, he may furnish to the Assessing Officer a declaration in writing along with his return of income under section 139 for the assessment year for which he is so assessable, to the effect that the provisions of this Chapter shall continue to apply to him in relation to the investment income derived from any foreign exchange asset being an asset of the nature referred to in sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) of clause (f) of section 115C: and if he does so, the provisions of this Chapter shall continue to apply to him in relation to such income for that assessment year and for every subsequent assessment year until the transfer or conversion (otherwise than by transfer) into money of such assets.


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