WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM ...

WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM
2003 by the Company) received on the shares of the Company is exempt from
tax.
2. As per section 10(38) of the IT Act, long-term capital gains arising from the
transfer of long-term capital asset being an equity share of the Company, where
such transaction is chargeable to securities transaction tax, will be exempt to tax
in the hands of the FIIs.
3. As per section 54EC of the IT Act and subject to the conditions and to the extent
specified therein, long-term capital gains (in cases not covered under section
10(38) of the IT Act) arising upto a maximum of 50 Lakhs on the transfer of a
long-term capital asset will be exempt from capital gains tax if the capital gains
are invested in a “Long Term Specified Asset” within a period of 6 months after
the date of such transfer. However, if the assessee transfers or converts the Long
Term Specified Asset into money 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.
4. As per section 74 Short-term capital loss suffered during the year is allowed to be
set-off against short-term as well as long-term capital gains of the said year.
Balance loss, if any, could be carried forward for eight years for claiming set-off
against subsequent years’ short-term as well as long-term capital gains. Longterm
capital loss suffered during the year is allowed to be set-off against longterm
capital gains. Balance loss, if any, could be carried forward for eight years
for claiming set-off against subsequent years’ long-term capital gains.
5. The tax rates and consequent taxation mentioned above will be further subject to
any benefits available under the Tax Treaty, if any, between India and the
country in which the FII has fiscal domicile. As per the provisions of section 90(2)
of the IT Act, the provisions of the IT Act would prevail over the provisions of the
Tax Treaty to the extent they are more beneficial to the FII.
6. As per section 111A of the IT Act, short-term capital gains arising from the sale
of Equity Shares transacted through a recognized stock exchange in India, where
such transaction is chargeable to securities transaction tax, will be taxable at the
rate of 15% (plus applicable surcharge and education cess).
7. As per section 115AD of the IT Act, FIIs will be taxed on the capital gains in
respect of securities that are not exempt under the provision of section 10(38) of
the IT Act, at the following rates:
Nature of income Rate of tax (%)
Long term capital gains 10
Short term capital gains – Non STT Suffered 30
Short Term Capital Gains – STT Suffered 15
The above tax rates have to be increased by the applicable surcharge and
education cess.
In case of long term capital gains, (in cases not covered under section 10(38)
of the IT Act), the tax is levied on the capital gains computed without
considering the cost indexation and without considering foreign exchange
fluctuation.
V. Benefits available to Mutual Funds:
As per section 10(23D) of the IT Act, any income of Mutual Funds registered
under the SEBI Act or Regulations made thereunder, Mutual Funds set up by
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