Section 115ACA of Income Tax Act "Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer"
115ACA. (1) Where the total income of an assessee, being
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 (hereafter in
this section referred to as the resident employee),
includes-
(a) income by way of dividends 71[, other than dividends
referred to in section 115-O,] on Global Depository Receipts
of an Indian company engaged in specified knowledge based
industry or service, issued in accordance with such
Employees' Stock Option Scheme as the Central Government
may, by notification in the Official Gazette, specify in
this behalf and purchased by him in foreign currency; or-
(b) income by way of long-term capital gains arising from
the transfer of Global Depository Receipts referred to in
clause (a),
the income-tax payable shall be the aggregate of-
(i) the amount of income-tax calculated on the income by way
of dividends 71[, other than dividends referred to in
section 115-O,] in respect of Global Depository Receipts
referred to in clause (a), if any, included in the total
income, at the rate of ten per cent;
(ii) the amount of income-tax calculated on the income by
way of long-term capital gains referred to in clause (b), if
any, at the rate of ten per cent; and
(iii) the amount of income-tax with which the resident
employee would have been chargeable had his total income
been reduced by the amount of income referred to in clauses
(a) and (b).
Explanation.-For the purposes of this sub-section,-
(a) "specified knowledge based industry or service" means-
(i) information technology software;
(ii) information technology service;
(iii) entertainment service;
(iv) pharmaceutical industry;
(v) bio-technology industry; and
(vi) any other industry or service, as may be specified by
the Central Government, by notification in the Official
Gazette;
(b) "subsidiary" shall have the meaning assigned to it in
section 4 of the Companies Act, 1956 (1 of 1956) and
includes subsidiary incorporated outside India.
(2) Where the gross total income of the resident employee-
(a) consists only of income by way of dividends 72[other
than dividends referred to in section 115-O,] in respect of
Global Depository Receipts referred to in clause (a) of
sub-section (1), no deduction shall be allowed to him under
any other provision of this Act;
(b) includes any income referred to in clause (a) or clause
(b) of sub-section (1), the gross total income shall be
reduced by the amount of such income and the deduction under
any provision of this Act shall be allowed as if the gross
total income as so reduced were the gross total income of
the assessee.
(3) Nothing contained in the first and second provisos to
section 48 shall apply for the computation of long-term
capital gains arising out of the transfer of long-term
capital asset, being Global Depository Receipts referred to
in clause (b) of sub-section (1).
Explanation.-For the purposes of this section,-
(a) "Global Depository Receipts" means any instrument in the
form of a depository receipt or certificate (by whatever
name called) created by the Overseas Depository Bank outside
India and issued to investors against the issue of,-
(i) ordinary shares of issuing company, being a company
listed on a recognised stock exchange in India; or
(ii) foreign currency convertible bonds of issuing company;
(b) "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;
(c) "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;
(d) "Overseas Depository Bank" means a bank authorised by
the issuing company to issue Global Depository Receipts
against issue of Foreign Currency Convertible Bonds or
ordinary shares of the issuing company.