Amendment of section 115ACA.
28. In section 115ACA of the Income-tax Act ,after sub-section (3), in the Explanation, in clause (a), with effect from the 1st day of April, 2016, for the words “issued to non-resident investors against the issue of ordinary shares or foreign currency convertible bonds of issuing company” occuring at the end, the following shall be substituted, namely:-
“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;”.
Notes on Clauses:
Clause 28 of the Bill seeks to amend section 115ACA of the Income-tax Act relating to tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer.
Clause (a) of the Explanation to the aforesaid section defines the expression “Global Depository Receipts” for the purposes of the section to mean an instrument in the form of a depository receipt or certificate created by the Overseas Depository Bank outside India and issued to non-resident investors against the issue of ordinary shares or foreign currency convertible bonds of issuing company.
It is proposed to amend the definition of “Global Depository Receipts” provided in the said clause to mean an instrument in the form of a depository receipt or certificate 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. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to assessment year 2016-17 and subsequent assessment years.
