sejal architectural glass limited - Securities and Exchange Board of ...

chargeable to tax as long term capital gains in the year in which such residential house is
transferred.
9. As per the provisions of Section 90(2) of the Act, the provisions of the Act would prevail
over the provisions of the tax treaty to the extent they are more beneficial to the Non
Resident.
Benefits available to Foreign Institutional Investors (‘FII’)
1. In case of a shareholder being a Foreign Institutional Investor (FII), in accordance with and
subject to the conditions and to the extent specified in Section 115AD of the Act, tax on
long term capital gain (not covered by sections 10(36) and 10(38)) will be 10% and on short
term capital gain will be 30% as increased by a surcharge and education cess at an
appropriate rate on the tax so computed in either case. However short term capital gains
on sale of Equity Shares of a company through a recognized stock exchange or a unit of an
equity oriented mutual fund effected on or after 1 st October 2004 and subject to Securities
transaction tax shall be taxed @ 10% as per the provisions of section 111A. It is to be noted
that the benefits of Indexation and foreign currency fluctuation protection as provided by
Section 48 of the Act are not available to FII.
2. As per the provision of Section 90(2) of the Act, the provisions of the Act would prevail over
the provisions of the tax treaty to the extent they are more beneficial to the Non Resident.
3. As per the provisions of section 10(38), long term capital gain arising from the sale of
Equity Shares in any company through a recognized stock exchange or from the sale of
units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes
place after 1 st October 2004 and such sale is subject to Securities Transaction tax.
4. As per the provisions of section 88E, where the business income of an assessee includes
profits and gains from sale of taxable securities, a rebate shall be allowed from the amount
of income tax equal to the Securities transaction tax paid on such transactions. However
the amount of rebate shall be limited to the amount arrived at by applying the average
rate of income tax on such business income.
5. In accordance with and subject to the conditions and to the extent specified in /section
54EC of the Act, the shareholders would be entitled to exemption from tax on long term
capital gains (not covered by sections 10 (36) and 10(38)) arising on transfer of their shares
in the Company if such capital gain is invested in any of the long term specified assets in
the manner prescribed in the said section. Where the long term specified assets is
transferred or converted into money at any time within a period of three years from the
date of its acquisition, the amount of capital gains exempted earlier would become
chargeable to tax as long term capital gains in the year in which the long term specified
asset is transferred or converted into money.
6. In accordance with and subject to the conditions and to the extent specified in Section
54ED of the Act, the shareholders would be entitled to exemption from long term capital
gain tax (not covered by sections 10 (36) and 10(38)) on transfer of their assets being listed
securities or units to the extent such capital gain is invested in acquiring Equity Shares
forming part of an ‘eligible issue of share capital’ in the manner prescribed in the said
section.
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