Section 193 — Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer

(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 knowl-
edge 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 income specified in column B of the Table below, the
income-tax payable shall be the aggregate of income-tax computed at the rate speci-
fied in the column C applied on the corresponding income specified in column B.
TABLE
Sl.
No.
Income Rate of Income-
tax payable
A B C
1. Income from dividend on Global Depository Receipts
of an Indian company engaged in specified knowledge
based industry or service, issued as per such Employees’
Stock Option Scheme as the Central Government may,
by notification41, specify in this behalf and purchased by
him in foreign currency.
10%
2. Income from long-term capital gains arising from the
transfer of Global Depository Receipts referred to in
serial number 1.
12.5%
3. Total income as reduced by income referred to in serial
numbers 1 and 2.
Rates in force.
(2) Where the gross total income of the resident employee—
( a) consists only of income by way of dividends in respect of Global Depository
Receipts referred to in sub-section (1) (Table: Sl. No. 1), no deduction
shall be allowed to him under any other provision of this Act;
( b) includes any income referred to in sub-section (1) (Table: Sl. No. 1
or 2),—
( i) the gross total income shall be reduced by such income; and
( ii) 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) The section 72(6) shall not apply for computation of long-term capital gains
arising out of the transfer of long-term capital asset, being Global Depository
Receipts referred to in sub-section (1) (Table: Sl. No. 2).
(4) 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 or in an International Financial
Services Centre 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; or
( iii) ordinary shares of issuing company, being a company incorporated
outside India, if such depository receipt or certificate is listed and
traded on any International Financial Services Centre;
( b) “information technology service” means any service which results from
the use of any information technology software over a system of infor -
mation technology products for realising value addition;
( c) “information technology software” means any representation of instruc-
tions, 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 pro-
cessing 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;
( e) “specified knowledge based industry or service” means—
( i) information technology software; or
( ii) information technology service; or
( iii) entertainment service; or
( iv) pharmaceutical industry; or
( v) bio-technology industry; or
( vi) any other industry or service, as specified by the Central Govern -
ment, by notification;
( f) “subsidiary” shall have the same meaning as assigned to it in section
2(87) of the Companies Act, 2013 (18 of 2013) and includes subsidiary
incorporated outside India.
Tax on certain incomes.