Income-tax Act, 1961 · Chapter XIIA: Special Provions Relating to Certain Incomes of Non-Residents
Section 115D: Special provision for computation of total income of non-residents
The Income-tax Act, 1961 was repealed by the Income-tax Act, 2025 from 1 April 2026. The text is kept here because the judgments below apply it.
In plain words
This section limits tax deductions for non-resident Indians. It blocks all deductions for investment income and long-term capital gains. If a non-resident has other types of income, deductions under Chapter VI-A are calculated only on that remaining income, excluding the investment and capital gains portions.
- No deduction for expenditure or allowance is allowed when computing investment income of a non-resident Indian.
- If gross total income is only investment income or long-term capital gains, no deduction is allowed under Chapter VI-A.
- The second proviso to section 48 does not apply to income chargeable under the head Capital gains in this specific case.
- If gross total income includes other income along with investment income or long-term capital gains, the total is reduced by the investment and capital gains amount.
- Deductions under Chapter VI-A are then allowed as if the reduced amount were the entire gross total income.
A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.
Official text
(1) No deduction in respect of any expenditure or allowance shall be allowed under any provision of this Act in computing the investment income of a non-resident Indian.
(2) Where in the case of an assessee, being a non-resident Indian,—
(a) the gross total income consists only of investment income or income by way of long-term capital gains or both, no deduction shall be allowed to the assessee [under Chapter VI-A and nothing contained in the provisions of the second proviso to section 48 shall apply to income chargeable under the head —Capital gains‖];
(b) the gross total income includes any income referred to in clause (a), the gross total income shall be reduced by the amount of such income and the deductions under Chapter VIA shall be allowed as if the gross total income as so reduced were the gross total income of the assessee.
Source: India Code (Legislative Department), the text of the Act as it stood before its repeal. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.