Section 44BBD, introduced by the Finance Act 2025, is a presumptive taxation scheme designed to attract foreign expertise into India’s electronics manufacturing sector by simplifying tax compliance for non-residents.
Who It Applies To
Non-resident entities that:
- Provide services or technology to a resident Indian company
- That company must be setting up or operating an electronics manufacturing facility under a scheme notified by the Ministry of Electronics and Information Technology (MeitY)
Key Features
- Presumptive Income: 25% of the total receipts from such services will be deemed as taxable business income.
- No Deductions Allowed: No further deductions for expenses, depreciation, or losses under Sections 32 or 72.
- Overrides Normal Provisions: Operates notwithstanding Sections 28 to 43A, meaning it bypasses standard profit computation rules.
- Effective Date: Applies from Assessment Year 2026–27 (i.e., from 1 April 2026
