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Amendment in Finance Bill 2020 towards Income from Sale, Distribution or Exhibition of Cinematographic Films is Taxable in case of Non-Resident
[Effective from Assessment Year 2021-22]

Section 9(1)(vi) provides for certain income by way of royalty as deemed to accrue or arise in India. Explanation 2 of said clause defines the term ‘royalty’ to, inter alia, mean the transfer of all or any rights (including the granting of a license) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting.

However, the said Explanation specifically excludes consideration for the sale, distribution or exhibition of cinematographic films. Due to such exclusion, such royalty income is not taxable in India even if the DTAA gives India the right to tax such royalty. There is no such exemption in the corresponding laws of partner countries leading to discrimination against Indian residents. Thus, the Finance Bill 2020 proposes to amend the definition of royalty so as not to exclude consideration for sale, distribution or exhibition of cinematographic films from its meaning.
 
Consequential Amendments in Finance Bill 2020 due to Substitution of SEBI (FPI) Regulations
[Effective from Assessment Year 2021-22]
Tax Amendments in Finance Bill 2020 Amendment of Section 295 in Finance Bill 2020 that CBDT to make Rules for Income Computation of Non- Residents from Operations Carried Out in India
[Effective from Assessment Year 2021-22]
Income Tax Slab for Financial Year 2020-21 (AY : 2021-22)

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