FUTURA POLYESTERS LIMITED - IDBI Capital

7. As per the provisions of Section 115 I of the Act, a non-resident Indian may elect not to be
governed by the provisions of chapter XII-A for any assessment year by furnishing his return of
income for that assessment year under Section 139 of the Act, declaring therein that the provisions
of chapter XII-A shall not apply to him for that assessment year and accordingly his total income
for that assessment year will be computed in accordance with the other provisions of the Act.
8. Benefits outlined in Paragraph B I (5), (6) above are also available to a non-resident/non-resident
Indian shareholder.
III. Foreign Institutional Investors (FIIs)
1. Dividend income, received from the domestic Company shall be exempt under Section 10(34) of the Act.
2. Capital Gains
Under Section 115AD, income (other than income by way of dividends referred in Section 115-O) received
in respect of securities (other than units referred to in Section 115A) shall be taxable at the rate of 20%
(plus applicable surcharge on tax and education cess on tax and surcharge).
Under Section 115AD, capital gains arising from transfer of securities (other than units referred to in
Section 115AB) which are not exempt under Section 10(38), shall be taxable as follows:
Securities which are held for the period of upto or less than twelve months and where such transaction is
chargeable to securities Transaction Tax, capital gain shall be taxable at the rate of 15% (plus applicable
surcharge on tax and education cess on tax and surcharge). Securities other than those held for the period of
upto or less than twelve months and where such transaction is not chargeable to Securities Transaction Tax,
capital gain shall be taxable at the rate of 30% (plus applicable surcharge on tax and education cess on tax
and surcharge);
Securities which are held for the period of more than twelve months shall be taxable at the rate of 10% (plus
applicable surcharge on tax and education cess on tax and surcharge). Such capital gains would be
computed without giving effect of first proviso and without indexation as provided in the second proviso to
Section 48.
3. Long-term capital gains arising on transfer of equity shares in our Company, which is held for the period of
more than twelve months and where such transaction is chargeable to Securities Transaction Tax, shall be
exempt from tax under Section 10(38) of the Act.
4. Benefit of exemption under Section 54EC shall be available as outlined in Paragraph B (I) (5) above.
BENEFITS UNDER THE WEALTH TAX ACT, 1957
‘Asset’ as defined under section 2(ea) of the Wealth Tax Act, 1957, does not include shares in Companies and
hence, shares are not liable to wealth tax.
BENEFITS UNDER THE GIFT-TAX ACT, 1958
Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore any gift of shares will
not attract gift tax.
Note
1 Our comments are based on the law as of date. Tax rates mentioned above are that which are currently
applicable. Tax laws are subject to changes from time to time and as such any changes may affect the
advice contained in our opinion. We have no responsibility to update our advice for events and
circumstances occurring after the date of this opinion, unless specifically requested by you.
2 In respect of non-residents, the tax rates and the consequent taxation above shall be subject to any
further benefits available under the double taxation avoidance agreements, if any, between India and
the country in which the non-resident has fiscal domicile.
For N. M. Raiji and Co.,
Chartered Accountants
Place: Mumbai
Date: June 10, 2008
CA. Y. N. Thakkar
Partner
Membership No. 33329
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