Section 194 — [Ss. 115B, 115BB, 115BBF, 115BBG, 115BBH and 115BBJ of the 1961 Act]

(1) Irrespective of anything contained in any other provision of this Act, where
the total income of an assessee as mentioned in column B of the Table below,
includes income of the nature specified in column C of the said Table, the income-tax
payable by such assessee, for a tax year, shall be the aggregate of—
( a) income-tax calculated on income mentioned in column C, at the rate
mentioned in column D, subject to the conditions specified in column
E; and
( b) income-tax with which the assessee would have been chargeable had his
total income been reduced by income mentioned in column C thereof.
TABLE
Sl. No. Assessee Income Rate
of tax
Conditions
A B C D E
1. Any person. Winnings (other than
from any online game)
from—
( a) lottery; or
( b) crossword puzzle;
or
( c) race including
horse race (not
being income from
the activity of own-
ing and maintain-
ing race horses); or
( d) card game and
other game of any
sort; or
( e) gambling or bet -
ting of any form
or nature.
30% Nil.
2. A person, res-
ident in India
and who is
a patentee
(herein refe-
rred to as an
eligible asses-
see).
Royalty in respect of a
patent developed and
registered in India.
10% (a) No deduction in
respect of any
expenditure or
allowance shall
be allowed to the
eligible assessee
under any provi-
sion of this Act
in computing his
income referred
to in column C;
(b) an option for tax-
ation of income
by way of roy -
alty in respect
Sl. No. Assessee Income Rate
of tax
Conditions
A B C D E
of a patent de -
veloped and
registered in
India is exer -
cised in the pre-
scribed manner,
on or before the
due date speci -
fied under sec -
tion 263(1) for
furnishing the
return of income
for the relevant
tax year;
(c) where an op -
tion is exercised
under clause
(b) and the el -
igible assessee
does not offer
its income for
taxation as per
the provisions of
columns C and D
for any of the five
tax years, suc -
ceeding such tax
year, then such
assessee shall
not be eligible to
claim the benefit
of the provisions
of columns C
and D for five
tax years subse-
quent to the tax
year in which
such income has
not been offered
to tax as per such
provisions.
3. Any person. Income by way of trans-
fer of carbon credits.
10% No deduction in re -
spect of any expen -
diture or allowance
shall be allowed to
Sl. No. Assessee Income Rate
of tax
Conditions
A B C D E
the assessee under any
provision of this Act in
computing his income
referred to column C.
4. Any person. Any income from the
transfer of any virtual
digital asset.
30% (a) No deduction in
respect of any ex-
penditure (other
than cost of ac -
quisition, if any)
or allowance or
set off of any loss
shall be allowed
to the assessee
under any provi-
sion of this Act in
computing the
income referred
to in column C;
and
(b) no set off of loss
from transfer of
the virtual dig -
ital asset com -
puted herein
shall be allowed
against income
computed under
any provision of
this Act to the as-
sessee and such
loss shall not be
allowed to be
carried forward
to succeeding
tax years.
5. Any person. Any income by way of
net winnings from any
online game, computed
in the manner, as may
be prescribed.
30% Nil.
6. Any person. Any profits and gains
from life insurance
business.
12.5% Nil.
(2) For the purposes of this section,—
( a) “carbon credit”, in respect of one unit, means reduction of one tonne
of carbon dioxide emissions or emissions of its equivalent gases which
is validated by the United Nations Framework on Climate Change and
which can be traded in market at its prevailing market price;
( b) “computer resource” shall have the same meaning as assigned to it in
section 2(1)(k) of the Information Technology Act, 2000 (21 of 2000);
( c) “developed” means at least 75% of the expenditure incurred in India
by the eligible assessee for any invention in respect of which patent is
granted under the Patents Act, 1970 (39 of 1970) (herein referred to as
the Patents Act);
( d) “horse race” shall have the meaning assigned to it in section 94(6);
( e) “internet” means the combination of computer facilities and electro -
magnetic transmission media including related equipment and software,
comprising the interconnected worldwide network of computer networks
that transmits information based on a protocol for controlling such
transmission;
( f) “invention” shall have the same meaning as assigned to it in section
2(1)(j) of the Patents Act;
( g) “lump sum” includes an advance payment on account of such royalties
which is not returnable;
( h) “online game” means a game that is offered on the internet and is accessible
by a user through a computer resource including any telecommunication
device;
( i) “patent” shall have the same meaning as assigned to it in section 2(1)(m)
of the Patents Act;
( j) “patented article” and “patented process” shall have the same meanings
as respectively assigned to them in section 2(1)(o) of the Patents Act;
( k) “patentee” means the person, being the true and first inventor of the
invention, whose name is entered in the patent register as the patentee,
as per the Patents Act, and includes every such person, being the true and
first inventor of the invention, where more than one person is registered
as patentee under that Act in respect of that patent;
( l) “royalty”, in respect of a patent, means consideration (including any lump
sum consideration but excluding any consideration which would be the
income of the recipient chargeable under the head “Capital gains” or
consideration for sale of product manufactured with the use of patented
process or the patented article for commercial use) for the—
( i) transfer of all or any rights (including the granting of a licence) in
respect of a patent; or
( ii) imparting of any information concerning the working of, or the
use of, a patent; or
( iii) use of any patent; or
( iv) rendering of any services in connection with the activities referred
to in sub-clauses (i) to (iii);
( m) “true and first inventor” shall have the same meaning as assigned to it
in section 2(1)(y) of the Patents Act; and
( n) for the purposes of sub-section (1) (Table: Sl. No. 4), the term “transfer” as
defined in section 2(109), shall apply to any virtual digital asset, whether
capital asset or not.