Income-tax Act, 1961Section 115E
- Investment income 20%; LTCG on specified assets 10%/12.5%
- Optional regime; return not required in some cases (115G)
Applies to FY 2025-26 (AY 2026-27) and earlier years.
IT Act 1961 → 2025 / Section 115E
Non-residents & DTAASection 115E → Section 214
Special rates for NRIs on investment income from foreign-exchange assets
Section 115E of the old Income-tax Act, 1961 · new section 214 under the Income-tax Act, 2025
New reference Section 214 (Chapter XII-A: 212–217)
Income-tax Act, 2025Section 214 (Chapter XII-A: 212–217)
- Investment income 20%, LTCG on specified assets 12.5% (section 214)
- Exemption on reinvestment (old 115F): section 215
- Return exemption (old 115G): section 216
Applies from tax year 2026-27 (from 1 April 2026).
What changed
Renumbered; rates carried over. Finance Act 2026 merged the old 115H/115I provisions into section 217; section 218 now taxes OBU/IFSC unit business income.
Practice notes
- NRIs may opt out of this Chapter (old 115I → 217(2) after Finance Act 2026; CBDT shows 218).
Frequently asked
What is the tax on NRI investment income under the new Income Tax Act 2025?
Section 214: 20% on investment income and 12.5% on long-term capital gains on specified foreign-exchange assets.
What is section 115E called in the new Income-tax Act, 2025?
Section 115E of the Income-tax Act, 1961 corresponds to Section 214 (Chapter XII-A: 212–217) of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).
What changed in section 115E under the new Income Tax Act?
Renumbered; rates carried over. Finance Act 2026 merged the old 115H/115I provisions into section 217; section 218 now taxes OBU/IFSC unit business income.
Is section 115E still applicable for FY 2025-26?
Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 115E of the 1961 Act. Section 214 (Chapter XII-A: 212–217) of the 2025 Act applies from tax year 2026-27.