Section 216 — Return of income not to be furnished in certain cases. Successor to s.115G of the 1961 Act.
Section 216 is in Chapter XIII — Determination of Tax in Special Cases, which runs from section 190 to section 235.
The section relieves a non-resident Indian of the obligation to furnish a return of income under section 263(1) for a tax year where both conditions are met: clause (a), that his total income during the tax year consisted only of investment income, or income by way of long-term capital gains, or both; and clause (b), that the tax deductible at source under Chapter XIX-B has been deducted from such income.
Where a non-resident Indian's only Indian income is investment income or long-term capital gains and the tax has already been withheld, a return adds nothing the Department does not have. The section closes the filing obligation rather than the charge, and needs both conditions: any other income, or any failure to withhold, and the duty under section 263(1) revives.
The relief is all or nothing. Clause (a) says "only", so a single rupee of rent, salary, domestic interest or short-term capital gain takes the year outside the section. Clause (b) turns on tax actually deducted, not merely deductible, so a payer's default costs the non-resident Indian his exemption from filing. The terms carry the section 212 meanings for sections 213 to 218 — investment income being income derived from a foreign exchange asset. Nothing here exempts the income itself.
A non-resident Indian's only income for the year is dividend and interest derived from foreign exchange assets, from which tax has been deducted under Chapter XIX-B; he need furnish no return under section 263(1). Add rent from a flat in India, however small, and clause (a) fails because his total income no longer consists only of investment income or long-term capital gains.
At the point of deciding whether to file at all. A non-resident Indian relying on this section files nothing, and it is what he would point to if later asked why no return under section 263(1) was furnished.
his total income during the tax year consisted only of investment income or income by way of long-term capital gains or both
See the full 1961 to 2025 concordance.
