1[21AK. Conditions for the purpose of clause (4E) of section 10.- (1) The income accrued or arisen to, or received by, a non-resident as a result of transfer of non-deliverable forward contracts under clause (4E) of section 10 of the Act, shall be exempted subject to fulfillment of the following conditions, namely:-

  1. the non-deliverable forward contract is entered into by the non-resident with an offshore banking unit of an International Financial Services Centre which holds a valid certificate of registration granted under International Financial Services Centres Authority (Banking) Regulations, 2020 by the International Financial Services Centres Authority; and
  2. such contract is not entered into by the non-resident through or on behalf of its permanent establishment in India .


(2)  The offshore banking unit shall ensure that the condition provided in clause (ii) of sub-rule (1) is complied with.

 Explanation.- For the purpose of this rule, the expression,-

  1. "permanent establishment" shall have the meaning assigned to it in clause (iiia) of section 92F;


  1. "a non-deliverable forward contract" shall mean a contract for the difference between an exchange rate agreed before and the actual spot rate at maturity, with the spot rate being taken as the domestic rate or a market determined rate and such contract being settled with a single payment in a foreign currency; and


  1. “offshore banking unit” means a banking branch Unit located in an International Financial Services Centre, as referred to in sub-section (1A) of section 80LA of the Act..]







1. Inserted by the Income-tax (33rd Amendment) Rules, 2021Notificaion No. 136/2021 dated 10.12.2021.