Schedule IV — Income not to be included in total income of eligible non-residents, foreign companies and other such persons
Parent section: Section 11 Old Act equivalent: Section 10(4B)-(6BB)/(15)-(23G) of IT Act 1961
Schedule IV lists incomes not included in total income of eligible non-residents, foreign companies, and other such persons. Covers diplomatic exemptions, NRI/foreign national allowances, sovereign wealth fund income, pension fund income, and similar internationally-oriented exemptions.
Full Text
SCHEDULE IV [See section 11] INCOME NOT TO BE INCLUDED IN TOTAL INCOME OF ELIGIBLE NON- RESIDENTS, FOREIGN COMPANIES AND OTHER SUCH PERSONS In computing the total income of a tax year of any eligible person mentioned in column C of the Table below, the income mentioned in column B of the said Table shall not be included, subject to the conditions mentioned in column D of the said Table, and the expressions used in columns B to D shall have the meanings respec tively assigned to them in the Notes below the said Table: TABLE Sl. No. Income not to be included in total income Eligible persons Conditions A B C D 1. Any income by way of interest. (a) A person being an individual, who is a resident out side India as de fined in section 2(w) of the For eign Exchange M a n a g e m e n t Act, 1999 (42 of 1999); or (b) a person being an individual who has been permitted by the Such interest is on moneys standing to the credit of such person in a Non-Res ident (External) Account in any bank in India as per the said Act and the rules made thereunder. Sl. No. Income not to be included in total income Eligible persons Conditions A B C D
Reserve Bank of
India to maintain the said account. 2. Any remuneration received for service in the capacity as an official mentioned in column C, not being a citizen of India. An official, by whatev er name called, of an embassy, high commis sion, legation, commis sion, consulate or the trade representation of a foreign State, or as a member of the staff of any of these officials. (a) The remuneration re ceived as a trade com missioner or other official representative in India of the gov ernment of a foreign State (not holding office as such in an honorary capacity), or as members of the staff, if any, of the government, resident for similar purposes in the country con cerned enjoy a similar exemption in that country; and (b) the members of the staff are subjects of the country repre sented and are not engaged in any busi ness or profession or employment in India otherwise than as members of such staff. 3. Any remuneration re ceived as an employee for services rendered by him during his stay in India. A person who is an employee of a foreign enterprise, not being a citizen of India. (a) The foreign enterprise is not engaged in any trade or business in India; (b) his stay in India does not exceed in the aggregate a period of ninety days in such tax year; and (c) such remuneration is not liable to be deducted from the in Sl. No. Income not to be included in total income Eligible persons Conditions A B C D
come of the employer
chargeable under this Act. 4. Any income charge able under the head “Salaries”, received or due as remuneration for services rendered in connection with his employment on a foreign ship. Any individual being a non-resident, not being a citizen of India. The total stay of such in dividual in India does not exceed in the aggregate a period of ninety days in the tax year. 5. Any remuneration re ceived as an employee of the Government of a foreign State. An employee of the Government of a for eign State, not being a citizen of India. Such remuneration is re ceived during his stay in India in connection with his training in any establish ment or office of, or in any undertaking owned by— (a) the Government; or (b) any company in which the entire paid- up share capital is held by the Central Government or any State Government or State Governments, or partly by the Cen tral Government and partly by one or more State Governments; or (c) any company which is a subsidiary of a company referred to in clause (b); or (d) any corporation es tablished by or under a Central Act or State Act or Provincial Act; or (e) any society registered under the Societies Sl. No. Income not to be included in total income Eligible persons Conditions A B C D
Registration Act,
1860 (21 of 1860), or under any other law and wholly fi nanced by the Central Government, or any State Government or State Governments, or partly by the Cen tral Government and partly by one or more State Governments. 6. Any income arising by way of royalty or fees for technical services. Any foreign company. (a) Such company is no tified by the Central Government; and (b) such income is re ceived in pursuance of an agreement en tered into with the Central Government for providing services in or outside India in projects connected with security of India. 7. Any income arising by way of royalty from, or fees for technical services rendered in or outside India. A non-resident, not being a company, or a foreign company. (a) Such royalty is received from the National Technical Research Organisa tion; or (b) such fees is for tech nical services ren dered to the National Technical Research Organisation. 8. Interest received. Non-resident or a per son who is not ordi narily resident. Such interest is received in India on a deposit made on or after the 1st April, 2005 in an Offshore Banking Unit referred to in section 2(u) of the Special Economic Zones Act, 2005 (28 of 2005). Sl. No. Income not to be included in total income Eligible persons Conditions A B C D 9. Income from lease rentals, by whatever name called, of cruise ship. Foreign company. (a) Such income is re ceived from a speci fied company which operates such ship or ships in India; (b) such foreign compa ny and the specified company are sub sidiaries of the same holding company; and (c) such income is re ceived or accrues or arises in India for any relevant tax year be ginning on or before the 1st April, 2029. 10. Any income derived in India by way of interest, dividends or Capital gains from investments made. The European Eco nomic Community. Such investments are made out of its funds under such scheme as the Central Government may, by noti fication specify. 11. Any income received in India in Indian currency. A foreign company. (a) Such income is on account of sale of crude oil or any other goods or rendering of services, as may be notified by the Central Government in this behalf, to any person in India; (b) receipt of such income in India by the foreign company is pursuant to an agreement or an arrangement entered into by the Central Government or ap proved by the Central Government; (c) such foreign company and the agreement or Sl. No. Income not to be included in total income Eligible persons Conditions A B C D
arrangement is no
tified by the Central Government, having regard to the national interest; and (d) such foreign company is not engaged in any activity in India, other than activity resulting in such income. 12. Any income accruing or arising on account of storage of crude oil in a facility in India and sale of such crude oil to any person resi dent in India. A foreign company. (a) Such storage and sale by the foreign company is pursuant to an agreement or an arrangement entered into by the Central Government or ap proved by the Central Government; and (b) such foreign company and the agreement or arrangement is no tified by the Central Government, having regard to the national interest. 13. Any income accruing or arising on account of sale of leftover stock of crude oil, if any, from the facili ty in India after the expiry of the agree ment or arrangement referred to against serial number 12 or on termination of the said agreement or arrangement. A foreign company. Such sale shall be as per the terms mentioned in the said agreement or arrangement, subject to such conditions as may be notified by the Central Government in this behalf. [13A. Any income arising on account of pro viding capital goods, equipment or tooling to a contract manu- A foreign company, who is providing capital goods, equipment or tooling to the contract manufacturer for use in (a) Ownership of such capital goods, equip ment or tooling re mains with the foreign company; 39. Sl. Nos. 13A, 13B and 13C inserted by the Finance Act, 2026, w.e.f. 1-4-2026. Sl. No. Income not to be included in total income Eligible persons Conditions A B C D facturer, being a com pany resident in India. electronic manufactur ing in India. (b) such capital goods, equipment or tooling is under the control and direction of the con tract manufacturer; (c) the contract manufac turer is located in a custom bonded area, that is, a warehouse referred to in section 65 of the Customs Act, 1962 (52 of 1962); (d) the contract manufac turer produces elec tronic goods on behalf of the foreign company for a consideration; (e) such exemption shall be available up to the tax year 2030-2031. 13B. Any income which accrues or arises out side India, and is not deemed to accrue or arise in India. An individual, being a non-resident for a peri od of five consecutive tax years immediately preceding the tax year during which he visits India for the first time for rendering services in India in connection with any scheme as may be notified by the Central Government. (a) Such individual, during the relevant tax year renders any service in India in connection with any scheme as may be notified by the Central Government; (b) such exemption shall not be available be yond a period of five consecutive tax years commencing from the first tax year during which he visits India in connection with such scheme; and (c) such other conditions, as may be prescribed. 13C. Any income accruing or arising in India A foreign company. (a) Such foreign compa ny is notified by the Sl. No. Income not to be included in total income Eligible persons Conditions A B C D or deemed to accrue or arise in India by way of procuring data centre services from a specified data centre.
Central Government
in this behalf; (b) such foreign company does not own or oper ate any of the physical infrastructure or any resources of the spec ified data centre; (c) all sales by such for eign company to users located in India are made through a re seller entity being an Indian company; (d) such foreign com pany maintains and furnishes such infor mation in such form and manner, as may be prescribed; and (e) such exemption shall be available up to tax year ending on the 31st March, 2047.] 14. Any income falling under section 10(6A), (6B), (6BB), (15A), (15)(iiia), (15)(iiib), (15)(iiic) or (15)(iv) (a), (15)(iv)(b) or (15)(iv)(fa) of the Income-tax Act, 1961 (43 of 1961) subject to the conditions as specified therein. Note 1.—For the purposes of Sl. No. 9,––
(a) “specified company” means any company, other than a domestic company which operates cruise ships in India and opts to pay tax as per the provisions of section 61(2) (Table: Sl. No. 2);
(b) “holding company”, in relation to a foreign company or a specified company, means a company of which such companies are subsidiary companies; and
(c) “subsidiary company” or “subsidiary”, in relation to a holding company, means a company in which the holding company exercises or controls more than one- half of the total share capital either at its own or together with one or more of its subsidiary companies. Note 2: For the purposes of Sl. No. 10,––
“European Economic Community” means the European Economic Community
established by the Treaty of Rome of 25th March, 1957. [Note 3: For the purposes of Sl. No. 13C,––
(a) “data centre” means a dedicated secure space within a building or centralised loca tion where computing and networking equipment is concentrated for the purpose of collecting, storing, processing, distributing or allowing access to large amounts of data;
(b) “data centre services” means the services provided by a data centre through the use of physical infrastructure including land, buildings, mechanical electrical power equipments, cooling system, security and information technology infrastructure including servers, computers, storage systems, operating systems, security solutions, network and associated software platforms, networking and other equipment, human resource in India;
(c) “specified data centre” means a data centre which is––
(i) set up under an approved scheme and is notified in this behalf by the Central Government in the Ministry of Electronics and Information Technology; and
(ii) owned and operated by an Indian company.]
Provisos
None.
Explanations
None.
Key Structure
- Applies to: Non-residents, foreign companies, diplomatic personnel, NRIs, sovereign wealth funds, pension funds.
- Conditions: Each item has specific conditions in Column D; eligible persons in Column C.
- Time limits: Tax year.
- Monetary limits: Various per item.
- Exceptions: If conditions not met, income taxable under Section 11(2).
Cross-References
- Section 2
- Section 10
- Section 61
- Section 65
Amendment Notes
None noted from the extracted pages.