Section 214 is the substantive equivalent of 1961 s. 115 E -- the SPECIAL RATE provision for NRI investment income and LTCG from foreign exchange assets. Concessional rates: (a) Investment income (interest / dividends from foreign…
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ITA 2025 · Section 214
Section 214 — - TAX ON NRI INVESTMENT INCOME / LTCG
Section 214 is the substantive equivalent of 1961 s. 115E -- the SPECIAL RATE provision for NRI investment income and LTCG from foreign exchange assets. Concessional rates: (a) Investment income (interest / dividends from foreign exchange assets) -- 20%; (b) Long-term capital gains from transfer of foreign exchange assets -- 10% (without indexation; FA 2024 alignment). The provision is the operational core of the NRI concessional regime.
RATE STRUCTURE per Table: (a) Investment income (interest on Indian-Govt securities / Indian-co debentures / Indian-bank deposits acquired in FX): 20%; (b) LTCG on FX-asset transfer: 10% (without indexation). PRACTITIONER: alternative path NRI may elect for s. 209 (general NR rates). Comparison: (i) s. 214 specific NRI: 20% / 10% (no deductions); (ii) s. 209 general NR: 20% / 10% as well (similar; no deductions); (iii) DTAA: typically 5-15% (verified per treaty). Generally s. 214 / s. 209 / DTAA equivalent for most NRI scenarios; DTAA usually wins.
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