The ITAT ruled that capital gains from the sale of rights ...

Capital Gains from Rights Entitlement Sales Exempt Under Article 13(6) of India-Ireland DTAA

March 21, 2025

Case Laws     Income Tax     AT

The ITAT ruled that capital gains from the sale of rights entitlement are exempt from taxation in India under Article 13(6) of the India-Ireland DTAA. The Tribunal determined that rights entitlements constitute separate assets distinct from shares of the Indian Government, falling outside the scope of Articles 13(4) and 13(5). Consequently, such gains are taxable only in the resident state (Ireland), not in the source country (India). Additionally, the Tribunal held that capital losses under the Act read with Article 13(5) cannot be set off against short-term capital gains from rights entitlement sales since these gains are not taxable in India. The ITAT also directed the AO to rectify computational errors in the assessment order.

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