Section 90 of the Income-tax Act, 1961 - Double taxation agreement - Agreement for avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign countries - Japan - Amendment in Notification No. GSR 101(E), dated 1-3-1990
Notification No. 19/2012 was published on 24 May 2012. Its subject is Section 90 of the Income-tax Act, 1961 - Double taxation agreement - Agreement for avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign countries - Japan - Amendment in Notification No. GSR 101(E), dated 1-3-1990.
This one is about a tax treaty. India’s treaties enter Indian law by notification under section 90; where the instrument below is that notification, its date decides from when the treaty may be applied, and where it is a circular, it is the Board telling its officers how it reads the treaty — which is not the same thing.
Under section 90 of the Income-tax Act, 1961, the Central Government amends notification G.S.R. 101(E) dated 1 March 1990, by which the Convention between India and Japan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income was notified. In the Annexure to that notification, in Article 11 of the Convention, in paragraph 4, in clause (a), sub-clause (ii) is substituted to read "Japan Bank for International Co-operation" in place of the reference to the international business unit of Japan Finance Corporation. The effect is that the Japan Bank for International Cooperation is the Government-owned financial institution whose interest arising in the other Contracting State is not subject to tax under paragraph 3 of Article 11.
Both the Government of India and the Government of Japan agreed to omit the international business unit of Japan Finance Corporation from sub-clause (ii) of clause (a) of paragraph 4 of Article 11 and to substitute the Japan Bank for International Cooperation in its place.
| Under the 1961 Act | Now |
|---|---|
| s.90 | s.159 |
Section 90 of the Income-tax Act, 1961 - Double taxation agreement - Agreement for avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign countries - Japan - Amendment in Notification No. GSR 101(E), dated 1-3-1990
Notification No. 19/2012 [F. No. 506/69/81-FTD.1], dated 24-5-2012
Whereas the Convention between the Government of the Republic of India and the Government of Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on income has come into force on the 29th day of December, 1989 after the exchange of Instruments of Ratification as required by paragraph 1 of Article 28 of the said Convention;
And whereas, the said Convention was notified by the Central Government under section 90 of the Income-tax Act, 1961 (43 of 1961) in the Gazetee of India vide No. G.S.R. 101(E) dated 1st March, 1990;
And whereas, clause (a) of paragraph 4 of Article 11 of the said Convention provides the details regarding 'Central Bank' and 'financial institution wholly owned by the Government' in the case of Japan which will not be subject to tax under paragraph 3 of the said Article, in respect of interest arising to it in the other Contracting State;
And whereas, sub-clause (ii) of clause (a) of paragraph 4 of article 11 refers to 'international business unit of Japan Finance Corporation' as one of the financial institutions wholly owned by the Government;
And whereas, both the Government of India and the Government of Japan have now agreed to omit 'International business unit of Japan Finance Corporation' from sub-clause(ii) of clause (a) of paragraph 4 of Article 11 and substitute therein "Japan Bank for International Cooperation";
Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961, the Central Government hereby directs that the following amendments shall be made In the said notification as follows:-
In the said notification, in the Annexure, in Article 11 of the Convention, in paragraph 4, in clause (a), for sub-clause (ii), the following sub-clause shall be substituted, namely:-
"(ii) Japan Bank for international Co-operation;".
2. This notification shall be deemed to have taken effect from the 1st April 2012.
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1 April 2012, retrospectively.
In withholding on interest remitted to Japanese Government-owned financial institutions and in a certificate under section 195 for such remittances.
Source: the Income Tax Department’s own published text — its page for this instrument.
