Para 8 - Taxation on Foreign Currency Convertible Bonds - Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt Mechanism) Scheme, 1993

Taxation on Foreign Currency Convertible Bonds. 8. (1) Interest payments on the bonds, until the conversion option is exercised, shall be subject to deduction of tax at source at the rate of ten per cent. (2) Tax on dividend on the converted portion of the bond shall be subject to deduction of tax at source at the rate of ten per cent. (3) Conversion of Foreign Currency Convertible Bonds into shares shall not give rise to any capital gains liable to income-tax in India. (4) Transfers of Foreign Currency Convertible Bonds made outside India by a non-resident investor to another non-resident investor shall not give rise to any capital gains liable to tax in India.