Para 9 - Taxation on Exchangeable Bonds - Issue of Foreign Currency Exchangeable Bonds Scheme, 2008

Taxation on Exchangeable Bonds.- 9. (1) Interest payments on the bonds, until the exchange option is exercised, shall be subject to deduction of tax at source as per the provisions of sub-section (1) of Section 115 AC of the Income Tax Act, 196 l (43 of 1961). (2) Tax on dividend on the exchanged portion of the bond shall be in accordance with the provisions of sub-section (1) of Section 115 AC of the Income Tax Act, 1961 (43 of 1961). (3) Exchange of Foreign Currency Exchangeable Bonds into shares shall not give rise to any capital gains liable to income-tax in India. (4) Transfers of Foreign Currency Exchangeable Bonds made outside India by an investor who is a person resident outside India to another investor who is a person resident outside India shall not give rise to any capital gains liable to tax in India. F.No.4/21/2006-ECB (Dr. K.P. Krishnan) Jt. Secy.