Loading...

⚠ ✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ To Call / Whatsapp, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 Filters / Advanced Search ❯
TEXT

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws---- ❯
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ---- ❯
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
☰   Show Results ❯
    Consolidated Show Cause Notices under Sections 73 and 74 and Taxability of School Affiliation Servic...
    Fraudulent Input Tax Credit from Non-Existent Suppliers: Application of Sections 16, 74 and 155 of t...
    Case Laws Money Laundering
    Prolonged Pre-Trial Incarceration and Bail under Section 45 of the Prevention of Money-Laundering Ac...
    Case Laws Income Tax
    Prospective Operation of Section 56(2)(x)(b) in Stamp-Value Difference Cases Involving Immovable Pro...
    Seizure of Cash under Section 67 of the CGST Act and Interest on Illegal Retention
    Case Laws Income Tax
    Disallowance of Salary Expenditure for Allegedly Non-Genuine Services under Section 37
    Case Laws Income Tax
    Fair Market Value of Unquoted Equity Shares Under Section 56(2)(viib) and Rule 11UA
    Refund of Excess IGST Paid on Exports Following Clerical Error in FORM GSTR-3B
    Revocation of Cancellation of GST Registration for Non-Filing of Returns under Section 30 and Rule 2...
    Case Laws Income Tax
    TOLA, Section 149 and the Surviving-Time Test for Reassessment Proceedings
    Case Laws Customs
    Provisional Release of Unseized Imported Food Consignments under the Customs Act, 1962
    Case Laws Customs
    Recovery of Unpaid Anti-Dumping Duty After Self-Assessment Under Section 28 of the Customs Act, 1962
    Project-Wise Anti-Profiteering Methodology in Real Estate under Section 171 of the Central Goods and...
    Case Laws Income Tax
    Retirement Leave Encashment Exemption under Section 10(10AA)(ii) and Retrospective Application of No...
    Transit-State Jurisdiction under GST: Limits on Detention and Penalty in External Inter-State Suppli...
    Post-Facto Shareholder Ratification of Diversion of Preferential Issue Proceeds under the PFUTP Regu...
    Case Laws Income Tax
    Section 195 Withholding on Payments to Non-Residents: Royalty, Fees for Technical Services and Busin...
    Penalty: Scope of "Any Person" under Section 122(1A) of the Central Goods and Services Tax Act, 2017
    Recovery of Corporate Debtor Premises and Proof of Tenancy, Lease or Licence Rights under the Insolv...
    Service of GST Notices through the Common Portal: Statutory Validity and Practical Accessibility
❮
❯
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

Notes
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
Case Laws GST
Show AI Summary
School affiliation services fall outside educational exemption without a direct nexus to admissions or examination conduct.
Consolidated show cause notices may combine financial years governed by Sections 73 and 74 where liabilities are segregated period-wise, each component independently meets limitation and notice requirements, the additional ingredients for fraud-based proceedings are satisfied, and no actual prejudice arises. School affiliation and affiliation-form processing charges are independent taxable supplies where they concern institutional eligibility and compliance, rather than directly and immediately relating to student admission or the conduct of examinations. A broad connection with education does not satisfy the educational-services exemption.
Case Laws GST
Show AI Summary
Fraudulent input tax credit requires proof of fictitious supplies, absent goods receipt, and fraud-linked self-assessment, not cancellation alone.
Input tax credit from allegedly non-existent suppliers depends on proof of genuine supply and actual receipt of goods or services, not merely invoices, accounting entries, or banking-channel payments. Section 155 places the burden of establishing ITC eligibility on the claimant. Section 74 requires more than ineligible credit: the wrongful availment must be linked to fraud, wilful misstatement, or suppression to evade tax. Retrospective supplier-registration cancellation is relevant evidence but is not conclusive. A fraud-based notice must disclose facts showing fictitious suppliers, absence of supply, and a basis for inferring the recipient's knowledge or participation.
Case Laws Money Laundering
Show AI Summary
Prolonged pre-trial incarceration may justify conditional PMLA bail when delayed trials make continued detention constitutionally disproportionate.
Section 45 of the Prevention of Money-Laundering Act remains the stringent ordinary bail threshold, requiring prosecutorial opportunity and, on opposition, reasonable grounds to believe that the accused is not guilty and unlikely to offend while on bail. Article 21 nevertheless requires a separate, fact-sensitive inquiry where prolonged pre-trial detention and an unrealistic trial timetable make custody disproportionate. Relevant factors include custody length, trial progress, remaining witnesses, secured documentary evidence, source of delay, predicate-case status, and risks of absconding or witness interference. Conditions such as passport surrender, attendance, non-contact directions, and residence disclosure may safeguard the trial.
Case Laws Income Tax
Show AI Summary
Prospective operation of stamp-value taxation prevents retrospective application where property agreements and substantial payments predate the charging provision.
Section 56(2)(x)(b) applies to immovable property received for inadequate consideration only where its temporal and valuation conditions are satisfied. A stamp-value difference alone does not establish taxability. Where consideration was fixed and substantial payments or contractual performance occurred before the charging provision commenced, later conveyance or registration does not by itself attract the later charge. Agreement-date valuation is available only for covered transactions where consideration was fixed and paid, wholly or partly, through prescribed banking or electronic modes on or before the agreement date. The tax authority must identify the correct statutory basis and provide a meaningful opportunity to respond.
Case Laws GST
Show AI Summary
GST cash seizure limits require statutory relevance and restitutionary interest for unlawfully retained currency following searches.
GST seizure powers cannot be used to take cash as a general investigative measure or security for a possible tax demand. Currency is excluded from goods, and "things" is confined contextually to articles useful or relevant as evidence in GST proceedings. Valid seizure and retention require recorded statutory reasons, procedural compliance and observance of return timelines. Unauthorised retention engages property protections; later return does not cure the deprivation, and accrued interest is restitutionary rather than delayed-refund interest.
Case Laws Income Tax
Show AI Summary
Salary expense genuineness requires proof of actual services, business purpose, and fair testing of adverse third-party statements.
Under Section 37(1), salary expenditure is deductible only where it is actually incurred wholly and exclusively for business purposes and is supported by proof of genuine employment, services rendered, business nexus, and payment. Bank transfers and accounting entries alone are not conclusive. Where a third-party statement is central to an allegation of non-genuine salary, the taxpayer should receive disclosure and a meaningful opportunity to rebut it, including cross-examination where appropriate. A retracted and uncorroborated statement is vulnerable as the sole basis for disallowance.
Case Laws Income Tax
Show AI Summary
Discounted cash flow valuation remains taxpayer-selected under prescribed rules, while tax scrutiny must identify specific valuation-date defects.
The taxpayer may elect a prescribed DCF valuation for unquoted equity shares, and scrutiny of that method does not permit substitution with Net Asset Value merely because it produces a lower fair market value. The Assessing Officer may examine projections, discount rates, terminal assumptions, computations and source data, but rejection requires demonstrably wrong facts, material errors, a wholly erroneous basis or objectively unsupported assumptions. Subsequent financial performance cannot alone invalidate a bona fide DCF valuation; the relevant inquiry remains the reasonableness of valuation-date information.
Case Laws GST
Show AI Summary
Excess IGST on exports remains refundable when later correction triggers automated refund and reconciliation proves duplicate payment.
Refund of excess IGST paid on zero-rated exports may arise where turnover and tax are mistakenly entered under non-zero-rated supplies in FORM GSTR-3B while export invoices and shipping bills are correctly reported in FORM GSTR-1. If the exporter then pays the same IGST in the correct zero-rated field and the automated refund is credited against that later payment, the earlier payment remains a separately identifiable potential excess; its claim is not a repeat request for the same export-tax refund.
Case Laws GST
Show AI Summary
GST registration revocation requires timely application, return compliance, payment of dues, and a reasoned statutory decision.
GST registration revocation after cancellation for return default is a conditional, time-bound process. An application under Section 30 and Rule 23 must ordinarily be filed within ninety days, subject to prescribed extension, and cannot be made until pending returns are filed and tax, interest, penalty and late fee are paid. Portal non-acceptance may permit online or physical submission where technically unavailable, but does not condone delay or ensure revocation. The competent authority must assess statutory eligibility, sufficient grounds and compliance while following notice and hearing requirements before rejection.
Case Laws Income Tax
Show AI Summary
Reassessment limitation under TOLA requires final notices to issue within surviving time and satisfy statutory safeguards.
Reassessment limitation under TOLA is a jurisdictional restraint. Transitional notices issued between 1 April 2021 and 30 June 2021 are treated as Section 148A(b) show-cause notices, but only the surviving time remaining until 30 June 2021 is available for completing the reassessment process. Periods for supply of material and the assessee's response are excluded, but the Section 148A(d) decision, statutory approval and final Section 148 notice must issue within the remaining period. For Assessment Year 2015-16, post-1 April 2021 notices are treated as time-barred.
Case Laws Customs
Show AI Summary
Unseized food consignments cannot face indefinite detention without lawful seizure, valid sampling, and prompt assessment.
Provisional release of an unseized imported food consignment is not mechanically governed by Section 110A, which applies to goods seized under Section 110. Customs may examine, test, verify and reassess imports, but indefinite retention without a seizure memorandum or disclosed reasons connecting the goods with confiscation is not justified. Food sampling should follow the specialised food-safety process through an authorised officer. A valid food-safety report may support conditional clearance, while classification, duty liability, confiscation and adjudication remain open. Revenue may be protected through proportionate security.
Case Laws Customs
Show AI Summary
Anti-dumping duty recovery permits post-clearance demands and consequential import IGST where self-assessment omitted an applicable levy.
Unpaid anti-dumping duty omitted during self-assessment may be pursued through the customs recovery procedure without prior appellate modification of the self-assessment. The recovery framework applies to anti-dumping duty through statutory incorporation of provisions concerning assessment, non-levy, short-levy, interest and recovery. Where anti-dumping duty is chargeable, it forms part of the aggregate value used to compute IGST on imports, potentially creating a consequential IGST short-payment. Recovery requires accurate assessment of notification coverage, product, origin, rate, valuation, limitation and procedural safeguards.
Case Laws GST
Show AI Summary
Project-wise anti-profiteering requires actual input tax credit measurement and area-based allocation of benefits to real-estate purchasers.
Real-estate anti-profiteering under Section 171 requires project-level identification of additional input tax credit and allocation of the saving across total project area on a per-square-foot basis. Purchase value may quantify credit attributable to project expenditure, but turnover or collections cannot serve as the allocation basis. The comparison must use pre-GST credit actually availed rather than merely available credit. GST collected on consideration inflated by an undistributed benefit forms part of the amount not passed on and remains distinct from statutory interest.
Case Laws Income Tax
Show AI Summary
Retirement leave encashment exemption applies under the enhanced notified ceiling while preserving non-government employee classification and statutory conditions.
Section 10(10AA)(ii) governs retirement leave-encashment exemption for non-Government employees, subject to the ten-month earned-leave measure, average-salary computation, and the notified monetary ceiling. Notification No. 31/2023 specifies an enhanced ceiling of Rs. 25,00,000, is deemed effective from 1 April 2023, and certifies that retrospective effect causes no adverse effect. The enhanced ceiling is treated as a remedial rationalisation of an existing exemption and may govern pending earlier-period matters, while preserving the distinction between Government and non-Government employees.
Case Laws GST
Show AI Summary
Transit GST jurisdiction limits detention penalties for documented inter-State supplies lacking a local taxable nexus.
Transit-State jurisdiction under GST permits interception, document production, e-way bill verification and authorised physical inspection of goods moving through an intermediate State. It does not, in a pure transit movement, support detention-related penalty for an external inter-State supply where origin and destination lie outside the intercepting State, no tax is payable there, and there is no evidence of diversion, local supply, fictitious or mismatched documents, or mismatch of goods. Cross-empowerment is administrative and does not create an independent territorial taxable nexus.
Case Laws SEBI
Show AI Summary
Shareholder ratification cannot cure preferential-issue fund diversion when disclosed objectives are abandoned, triggering securities-market fraud and disclosure concerns.
Post-facto shareholder approval cannot retrospectively validate diversion of preferential-issue proceeds contrary to issue-specific objects disclosed to shareholders and the market. A special resolution authorises the issue but does not permit unrestricted use of proceeds. Periodic deviation reporting, audit-committee review and utilisation disclosures promote transparency; they do not enable diversion followed by later regularisation. Immediate diversion, inadequate commercial justification and missing documentation may indicate that disclosed objects were not genuinely intended to be performed. Later amendment of corporate objects or shareholder ratification cannot cure a completed securities-market disclosure breach.
Case Laws Income Tax
Show AI Summary
Cross-border software payments require copyright-right, technical-service, and permanent-establishment analysis before withholding obligations are determined under applicable treaties.
Section 195 requires withholding only from a remittance to a non-resident that includes income chargeable in India. For software, royalty depends on transfer of copyright rights, not merely the right to install, access, use, or distribute a copyrighted article under restrictive terms. Where a DTAA is more beneficial, its royalty and FTS definitions control; treaty FTS may require technology to be made available. Amounts that are neither royalty nor FTS require consideration as business profits, ordinarily taxable only where profits are attributable to a permanent establishment. Composite payments require component-wise allocation and analysis.
Case Laws GST
Show AI Summary
Personal GST penalty requires proof that the beneficiary retained benefit and directed a covered invoice or credit transaction.
Section 122(1A) may impose personal GST penalty on a registered or unregistered person only for a covered invoice or input tax credit transaction. Liability requires cumulative proof that the individual retained an identifiable personal benefit and that the transaction was conducted at that person's instance. Directorship, employment, registration, signature authority, or association with the taxable entity neither independently establishes nor excludes liability. Proceedings require transaction-specific and person-specific allegations and findings. The provision operates prospectively for underlying acts or transactions occurring on or after 01.01.2021.
Case Laws IBC
Show AI Summary
Proof of tenancy rights governs insolvency recovery of corporate-debtor premises from occupants lacking enforceable possessory interests.
Where premises form part of the corporate debtor's assets, Sections 18 and 25 of the Insolvency and Bankruptcy Code, 2016 require the resolution professional to take custody, control, preservation and protection measures. An occupant resisting recovery must prove a subsisting tenancy, leasehold interest or enforceable licence through reliable evidence of the parties' intended relationship and its essential terms. Permission to stock goods or conduct limited business activity, prolonged occupation, and business or utility records do not independently create rights in the premises. Section 60(5)(c) supports insolvency jurisdiction over asset-recovery measures connected with the insolvency estate.
Case Laws GST
Show AI Summary
GST portal service requires statutory validity and practical accessibility before ex parte adjudication can fairly proceed.
GST portal service is a statutory method under Section 169, but its use in an ex parte demand proceeding depends on effective accessibility and a meaningful opportunity to reply and be heard. Rule 142 requires electronic DRC-01 and DRC-07 summaries to operate alongside the underlying show-cause notice and reasoned order. Portal placement, complete communication, e-mail transmission, technical reliability and proof of actual access may determine whether service is effective, whether waiver applies, and whether appellate limitation begins.

TMI Notes

Back

All TMI Notes

Showing Results for :
Reset Filters
No Records Found

TMI Notes

Comparison of Section 193 "Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

4 September, 2025

Contents
Acts
Rules & Regulations
Summary
Note

Note

-

Bookmark

(New) -

Download

Print

Print

Section 193 Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer.

Income-tax Act, 2025

At a Glance

The materials are two texts: (i) Section 193 of the Income-tax Act, 2025 (final statutory text) and (ii) Clause 193 of the Income Tax Bill, 2025 (Old Version). Both address tax treatment of income from Global Depository Receipts (GDRs) acquired in foreign currency by resident employees of certain knowledge-based Indian companies or their subsidiaries. The documents matter to resident individual employees, employers in specified industries, tax administrators and advisers. Effective date or enactment/decision date: Not stated in the document.

Background & Scope

Statutory hook: provision numbered 193 in the Income-tax Act, 2025 (and correspondingly in the Income Tax Bill, 2025 - Old Version). Subject-matter: special tax treatment and specified rates for income from dividends on GDRs purchased in foreign currency under employee stock schemes and long-term capital gains on transfer of such GDRs where the taxpayer is a resident individual employee of an Indian company engaged in specified knowledge-based industries or services or of its subsidiary. The texts define multiple terms for the purposes of the section/clause. Any additional statutory cross-references appearing: section 2(87) of the Companies Act, 2013 and section 72(6) of the Income-tax Act (reference to non-application). Other cross-references or rules: Not stated in the document.

Statutory Provision Mode

Text & Scope

The provision applies to a resident individual who is an employee of an Indian company engaged in a "specified knowledge based industry or service" or an employee of its subsidiary (including foreign subsidiary). When such resident employee's total income includes certain GDR-related incomes, special tax treatment applies. The Table specifies three categories:

  • Dividend on GDRs of an Indian company issued under employee stock option schemes (as notified) and purchased in foreign currency - taxed at 10%.
  • Long-term capital gains (LTCG) from transfer of those GDRs - taxed at 12.5%.
  • Remaining total income (total income reduced by items 1 and 2) - taxed at "Rates in force" (i.e., regular applicable tax rates).

Definitions relevant to scope are provided in subsection (4). Notable definitions: "Global Depository Receipts," "Overseas Depository Bank," and categories of "specified knowledge based industry or service" (information technology software; information technology service; entertainment service; pharmaceutical industry; bio-technology industry; and any other industry or service specified by Central Government notification). "Information technology software" and "information technology service" are defined with technical descriptions. The provision also treats subsidiary as per Companies Act, 2013 s.2(87), expressly including subsidiaries incorporated outside India.

Interpretation

The Act indicates a legislative intent to subject two specific types of GDR-related incomes received by resident employees in specified industries to specified, concessional or specialised tax rates (10% for dividends and 12.5% for LTCG), while preserving the regular taxation regime for the remainder of the taxpayer's income. The provision further isolates those GDR incomes for bespoke treatment by directing deductions and computation mechanics in subsection (2). The text suggests the approach of segregating certain income streams and taxing them at fixed rates rather than allowing them to be blended into progressive slab rates for the whole income.

Exceptions/Provisos

Key carve-outs and computational rules appearing in the text:

  • Subsection (2)(a): If gross total income consists only of dividends in respect of the GDRs (Table Sl. No. 1), no deduction shall be allowed to the individual under any other provision of the Act.
  • Subsection (2)(b): If gross total income includes any of the GDR incomes, the GDR income shall be excluded from gross total income for the purpose of computing deductions - i.e., deductions are computed as if gross total income were reduced by such GDR income.
  • Subsection (3): Section 72(6) shall not apply for computation of LTCG arising from transfer of the GDRs referred to in the table (i.e., rollover/aggregation rule in s.72(6) is inapplicable to these transfers).

Illustrations

  • Example 1: A resident employee receives only dividend income of INR X from GDRs purchased in foreign currency under a notified ESOS. Under the provision, tax on that income is 10% and no other deductions under the Act are permitted. (All numeric amounts illustrative; No numeric examples are provided in the statutory text.)
  • Example 2: A resident employee has salary and also realises LTCG of INR Y on transfer of qualifying GDRs. LTCG taxed at 12.5%; the LTCG amount is excluded from gross total income for purposes of computing deductions - deductions are applied against the reduced gross total income (i.e., gross total income minus the GDR incomes). The remaining income is taxed at rates in force.

Note: The text does not provide worked numerical examples. Not stated in the document.

Interplay

The provision expressly disapplies section 72(6) for computation of LTCG on the specified GDR transfers. It also cross-refers to Companies Act, 2013 s.2(87) for the definition of subsidiary. Any interaction with other sections, notifications or rules beyond those explicitly mentioned: Not stated in the document. The provision contemplates additional specification by the Central Government via notification for the ESOS eligible and for enumerating other industries/services (clause (f) in definitions).

Differences between the Two Texts and Practical Impact

Comparison identifies only limited textual divergences between the Section 193 of the Income-tax Act, 2025 (Document 1) and the Clause 193 of the Income Tax Bill, 2025 (Old Version) (Document 2). These differences and their practical impacts are summarised below.

  • Framing of subsection (1) tax computation: - Bill Old Version (Doc 2): states "the income-tax payable shall be the aggregate of income-tax specified in the column C thereof." - Act (Doc 1): states "the income-tax payable shall be the aggregate of income-tax computed at the rate specified in the column C applied on the corresponding income specified in column B."
    • Practical impact: The Act text expressly states that column C is a rate applied to the corresponding income (clarifies computational method). The Bill's wording could have been read as specifying absolute amounts; the Act removes ambiguity by explicitly making column C a rate. This clarification affects tax computation practice and removes potential interpretive disputes about method of calculation.
  • Table heading wording for item 3: - Bill: column C reads "Income-tax chargeable on such income." - Act: column C reads "Rates in force."
    • Practical impact: The Act's wording clarifies that for the residual taxable income (total income reduced by GDR income), existing tax rates (i.e., the rates otherwise in force) apply. The Bill language could be read as repeating a computation result rather than pointing to applicable rates. The Act aligns the table to conventional statutory drafting where special rates are set and remaining income taxed at prevailing rates.
  • Punctuation and enumeration of Table items in definitions: - Bill separates clauses in definition (4)(a)(i)-(iii) with slightly different punctuation and includes a trailing "and" before clause (f). - Act uses semicolons, and clause (f) follows without trailing "and."
    • Practical impact: These are drafting/presentation differences with no substantive change to meaning.
  • Scope language in opening of subsection (1): - Bill: lists "an individual, who is a resident and an employee of an Indian company engaged in specified knowledge based industry or service, or an employee of its subsidiary engaged in specified knowledge based industry or service." - Act: same content but formatted with parenthetical "(hereafter in this section referred to as the resident employee)."
    • Practical impact: substantively identical; Act formalises the short-form label "resident employee" for later cross-reference in the section.
  • Miscellaneous editorial differences: Minor differences such as insertion of "Income" in the Act table heading and more explicit phrasing in Act sub-section (1) (described above).
    • Practical impact: primarily clarity and removal of ambiguity in computation; no substantive extension or restriction of scope evident from the texts provided.

Practical Implications

  • Compliance and risk areas: Employers and resident employees must identify whether GDRs were "issued as per such Employees' Stock Option Scheme as the Central Government may, by notification, specify" and whether the GDRs were purchased in foreign currency. Tax withholding and reporting must reflect the special rates (10% for dividends, 12.5% for LTCG). Failure to segregate these incomes for computation of deductions as mandated could result in under- or over-claiming of deductions and assessments.
  • Record-keeping/evidence: The text implies the need to maintain documentation proving (a) GDRs were acquired under the relevant ESOS and purchased in foreign currency; (b) GDRs are of an Indian issuing company and listed on a recognised Indian stock exchange (where applicable) or meet other listing criteria in clause (4)(a); (c) employment status and industry classification of the employer/subsidiary. The statute does not prescribe specific forms or timelines. Not stated in the document.

Key Takeaways

  • The Act prescribes special tax rates for GDR-related dividend income (10%) and long-term capital gains (12.5%) for resident employees of specified knowledge-based companies or their subsidiaries.
  • GDR incomes are segregated from gross total income for the purpose of deduction computation; where gross total income consists only of GDR dividends, no deductions are allowed.
  • Section 72(6) is explicitly not applicable to LTCG on the specified GDRs.
  • Definitions tightly frame "Global Depository Receipts" and "specified knowledge based industry or service," with a power for the Central Government to notify further industries/services and ESOS schemes.
  • Main differences between the Bill Old Version and the Act are drafting clarifications concerning the computation method (Act clarifies column C is a rate) and the wording for residual income taxation ("Rates in force"), which reduce ambiguity but do not change substantive scope.

Full Text:

Section 193 Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer.

Topics

Acts Income Tax