Global Depository Receipts taxation: special rates, restricted deductions, and defined eligibility for resident employee investors.

Special tax rates apply to dividend income and long-term capital gains arising from Global Depository Receipts purchased in foreign currency, subject to the assessee being a resident individual employed by an Indian company, or its subsidiary, engaged in a specified knowledge-based industry or service. The concessional treatment is confined to eligible GDRs issued against specified underlying instruments, while other income continues to be taxed at the normal rates in force. Deductions are restricted where income consists only of GDR dividends, and special computation rules apply for covered income.

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