Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer – Section 115ACA - Income Tax - Ready Reckoner - Income Tax

Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer Section 115ACA Income received by Resident Individual and an employee of an Indian company or its subsidiary engaged in specified knowledge-based industry or service GDR issued as per ESOP s Tax Rate:- Dividend on GDR of an Indian company 10% Long-term capital gain on transfer of such GDRs 10% [ Upto 22.07.2024 ] 12.5% [ From 23.07.2024 ] [ Substituted vide Finance (No. 2) Act, 2024 ] Explanation: Specified knowledge based industry or service means- Information technology software; information technology software means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form and capable of being manipulated or providing inter-activity to a user, by means of an automatic data processing machine falling under heading information technology products but does not include non-information technology products. Information technology service; information technology service means any service which results from the use of any information technology software over a system of information technology products for realising value addition. Entertainment service; Pharmaceutical industry; Bio-technology industry; and Any other industry or service, as may be specified by the central government Notes:- GDR means any instrument in the form of a depositary receipt or certificate created by the Overseas Depository Bank outside India or in an IFSC and issued to investors against the issue of Ordinary shares of company listed on a recognised stock exchange in India; or Foreign Currency convertible bonds of issuing company; Ordinary Shares of issuing company, being a company incorporated outside India, if such depositary receipt or certificate is listed and traded on any IFSC. First and Second Proviso To Section 48 : shall not apply for computation of LTCG arising out of LTCA being GDR. [ Indexation of cost of acquisition ] Rate of exchange for conversion of rupees into foreign currency and reconversion of foreign currency into rupees for the purpose of computation of capital gains under the proviso to clause (a) of section 48(1) of the Income-tax Act, 1961. [ Rule 115A ] [ Form detailed refer this chapter ]