CBDT for tax sops on GDRs issued to staff

Our Economic Bureau

New Delhi, Nov 20: The Central Board of Direct Taxes (CBDT) has notified that the global depository receipts (GDRs) issued to employees under foreign convertible bonds and ordinary shares would be eligible for concessional rate of taxation. According to an official release, GDRs issued to employees under foreign currency convertible bonds and ordinary shares (through Depository Receipt Mechanism) Scheme 1993, would be eligible for concessional rate of taxation under Section 115 ACA of the Income Tax Act.

The dividend received on such GDRs, other than dividends referred to in Section 115-O, would be taxed at the rate of 10 per cent, said the release.

Income earned by way of long-term capital gains on transfer of the GDRs would also be taxed at the rate of 10 per cent, the release said.