Section 4 of Finance Act 2018 : Amendment of section 9 of Income Tax

By | April 1, 2018
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(Last Updated On: April 14, 2018)

Section 4 of Finance Act 2018

[Section 4 of Finance Act 2018 deals with Amendment of section 9. and is covered in CHAPTER III DIRECT TAXES]

Amendment of section 9.

4. In section 9 of the Income-tax Act, in sub-section (1), in clause (i), with effect from the 1st day of April, 2019,—

(I)in Explanation 2, for clause (a), the following clause shall be substituted, namely:—
“(a)has and habitually exercises in India, an authority to conclude contracts on behalf of the non-resident or habitually concludes contracts or habitually plays the principal role leading to conclusion of contracts by that non-resident and the contracts are—
(i)in the name of the non-resident; or
(ii)for the transfer of the ownership of, or for the granting of the right to use, property owned by that non-resident or that non-resident has the right to use; or
(iii)for the provision of services by the non-resident; or”;
(II)after Explanation 2, the following Explanation shall be inserted, namely:—
Explanation 2A.—For the removal of doubts, it is hereby clarified that the significant economic presence of a non-resident in India shall constitute “business connection” in India and “significant economic presence” for this purpose, shall mean—
(a)transaction in respect of any goods, services or property carried out by a non-resident in India including provision of download of data or software in India, if the aggregate of payments arising from such transaction or transactions during the previous year exceeds such amount as may be prescribed; or
(b)systematic and continuous soliciting of business activities or engaging in interaction with such number of users as may be prescribed, in India through digital means:
Provided that the transactions or activities shall constitute significant economic presence in India, whether or not,—
(i)the agreement for such transactions or activities is entered in India; or
(ii)the non-resident has a residence or place of business in India; or
(iii)the non-resident renders services in India:
Provided further that only so much of income as is attributable to the transactions or activities referred to in clause (a) or clause (b) shall be deemed to accrue or arise in India.’.

Finance Act 2018 : Assented by President : Download Print Notification

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