Section 47(viiab) - Transfer by a non-resident on a recognized stock exchange located in any International Financial Services Centre

Section 47(viiab) exempts non-residents' transactions in IFSCs from capital gains tax if conducted in foreign currency.

Section 47(viiab) of the Income Tax Act specifies that certain transactions by non-residents on recognized stock exchanges in International Financial Services Centres are not regarded as transfers for capital gains purposes. This includes transactions involving bonds, global depository receipts, derivatives, rupee-denominated bonds of Indian companies, and other notified securities, provided the consideration is in foreign currency. These securities include foreign currency-denominated bonds and equity shares, mutual fund units, business trust units, alternative investment fund units, and bullion depository receipts. The provision was inserted by the Finance Act 2018 and effective from April 1, 2019.