Taxation on shares issued under Global Depositary Receipt Mecha­nism

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..... pt Mecha nism. 9. (1) Under the provisions of the Income-tax Act, income by way of dividend on shares will be taxed at the rate of 10 per cent. The issuing company shall transfer the dividend payments net after deduct tax at source to the Overseas Depositary Bank. (2) On receipt of these payments of dividend after taxation, the Overseas Depositary Bank shall distribute them to the non-resid .....

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..... he date of advice of their redemption by the Overseas Depositary Bank, the capital gains arising on the sale thereof will be treated as long-term capital gains and will be subject to income-tax at the rate of 10 per cent under the provisions of section 115AC of the Income-tax Act. If such shares are held for a period of less than twelve months from the date of redemption advice, the capital gains .....

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..... also be charged to tax at the rate of 10 per cent, in accordance with the provisions of section 115AC(1). (6) When the redeemed shares are sold on the Indian Stock Exchanges against payment in rupees, these shares shall go out of the purview of section 115AC of the Income-tax Act and income therefrom shall not be eligible for the concessional tax treatment provided thereunder. After the transfer .....

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