Section 210 - Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer
For specified funds, only income attributable to eligible non-resident-held units qualifies. Daily AUM attribution and annual Forms 69/70 can be rate conditions, not mere reporting formalities.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Current law and effective date
Section 210 is controlled against the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The Act and Income-tax Rules, 2026 operate from 1 April 2026; earlier tax years and saved proceedings require the repeal-and-savings framework rather than automatic migration.
Primary statute: Income Tax Department consolidated Act | Rules: Notified Income-tax Rules, 2026
2-minute decode
For specified funds, only income attributable to eligible non-resident-held units qualifies. Daily AUM attribution and annual Forms 69/70 can be rate conditions, not mere reporting formalities.
Who should use this section
Non-residents, foreign companies, funds, trusts, business trusts, investment vehicles and their advisers when receipts or distributions can fall within the special computation or rate architecture of section 210.
How section 210 works in practice
Section 210 sits in Chapter 13 (Determination of Tax in Special Cases) and should be read as a connected rule rather than an isolated label. The practical question is whether the facts actually satisfy the trigger for “Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer”. For section 210, begin by characterising the person, instrument and receipt before applying a rate. In a section 210 file, residence, treaty entitlement, beneficial ownership, source, permanent-establishment nexus, foreign-currency acquisition, fund/trust status and distribution reporting can move the same cash receipt into different tax buckets. The section 210 computation should therefore be reconciled to withholding and return reporting rather than prepared in isolation. The operating controls are: Maintain daily AUM and unit-holder residence data; File Forms 69/70 where applicable; Separate sections 196 and 198 gains from other security gains. A reviewer should record why maintain daily AUM and unit-holder residence data., because that conclusion drives the downstream computation, reporting or procedural consequence.
Old-law bridge
section 115AD
The old-law bridge is a research aid, not an automatic precedent transfer. Match the old provision, the current section, saved proceedings and effective dates before importing an older interpretation.
Current-law control
No separate Finance Act 2026 delta is recorded for section 210 in the current-law register. The page therefore follows the consolidated Act wording and the current Rules mapping, with the official consolidated statute controlling if a later notification or amendment affects the provision.
Professional alert
Maintain daily AUM and unit-holder residence data. File Forms 69/70 where applicable. Separate sections 196 and 198 gains from other security gains.
Connected Income-tax Rules, 2026 and Forms
Worked application
A specified fund has ₹10 crore security gain but only 70% is attributable to qualifying non-resident units under Rule 140. The concessional section 210 bucket is limited to the computed attributable amount.
Evidence / compliance checklist
- Maintain daily AUM and unit-holder residence data.
- File Forms 69/70 where applicable.
- Separate sections 196 and 198 gains from other security gains.
- Preserve residence/treaty and beneficial-ownership evidence relevant to section 210.
- Reconcile gross receipts, withholding certificates and return disclosure for section 210.
- Keep instrument, acquisition-currency and distribution records where section 210 depends on them.
Common mistake
Applying the domestic special rate in section 210 without first testing character, source and treaty interaction. For section 210, the 1961 Act bridge helps research, but the current 2025 Act wording and section 159 treaty comparison control the final position.
Recommended approach
For section 210, create a one-page legal-to-evidence matrix. For section 210, put the current statutory condition in the first column, the transaction or procedural fact in the second, the supporting document in the third, and the tax/procedural consequence in the fourth. The first checkpoint should be: Maintain daily AUM and unit-holder residence data. This section 210 matrix makes reviewable differences visible before a return, opinion, notice response or litigation position is finalised.
Thresholds, rates, periods and timing checkpoints
- 20%
- 10%
- 30%
- 12.5%
- 70%
- ₹10 crore
Related provisions and interaction map
Section 210 interacts with residence/source rules, section 159 treaty relief, withholding, return obligations and the legal character of the receipt or distribution. Where section 210 uses a trust/fund statement, the payor and recipient records should reconcile to the same tax bucket.
Direct navigation / cross-checks: section 209, section 198, section 211
Validated statutory core - official current source controlled
Text-status note: This page presents a validated operative statutory core rather than pretending a summary is verbatim law. Use the linked official consolidated Act before quoting sub-section language in a filing, opinion or litigation document.
Primary-source trail
Statute: Income-tax Act, 2025 as amended by Finance Act, 2026
Rules: Income-tax Rules, 2026
Law navigation: Income Tax Department 2025 Act / Rules hub
Forms guidance: Official FAQs / Guidance Notes on Income-tax Rules, 2026 forms
Quoting note: The official consolidated Act controls verbatim legislative language.
FAQs
Does an old Income-tax Act, 1961 decision automatically decide section 210?
No. The old-law bridge helps research, but transferability depends on materially matching language, transition rules and any Finance Act 2026 change.
Which source should be quoted in advice or litigation?
Quote the official consolidated statute for the relevant tax year. Where this page presents a validated statutory core rather than complete verbatim text, use the official Act for sub-section wording.
What should be checked immediately before acting?
Re-check the current statutory text, the section-specific Rule/Form mapping and any notification or court order relevant to the exact facts. Section 210 should not be applied from a historic section number or a generic tax summary alone.