Tax on income from foreign currency bonds and GDRs: concessional rates with restricted deductions and carry forward rules.

Non resident income from interest on specified bonds purchased in foreign currency and dividends on GDRs attract concessional flat rates, with long term capital gains on transfer of such instruments taxed at a substituted concessional rate. The regime disallows expense and chapter VI A deductions in specified cases, excludes certain provisos for cost computation for LTCG, permits carry forward and set off of losses but not unabsorbed depreciation, and exempts return filing when income consists only of interest subject to TDS.

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