Conversion of foreign bank branch into subsidiary exempts capital gains and conditions tax treatment on notified compliance. Conversion of an Indian branch of a foreign bank into an Indian subsidiary under a Reserve Bank of India scheme results in capital gains on conversion not being chargeable to tax, and subjects treatment of unabsorbed depreciation, set-off and carry forward of losses, tax credit for deemed income, and computation of income for the foreign company and the Indian subsidiary to exceptions, modifications and adaptations notified by the Central Government; failure to comply with scheme conditions cancels these benefits and permits reassessment and amendment of prior-year income.