RED HERRING PROSPECTUS Dated August 24 ... - Globus Spirits

the assessee and the tax payable for the relevant previous year shall be ten per cent of
such book profit.
(ii)
BENEFITS AVAILABLE TO RESIDENT SHAREHOLDERS:
1. Exemption under Section 10(34)
Dividend (whether interim or final) declared, distributed or paid by the Company is
completely exempt from tax in the hands of the shareholders of the Company as per the
provisions of section 10(34) of the IT Act.
2. Exemption of Long-Term Capital Gain under Section 10(38)
Under Section 10(38) of the Act, long term capital gain arising to the shareholder from
transfer of a long term capital asset being an equity share in the company or unit of an
equity oriented mutual fund (i.e. capital asset held for the period of twelve months or
more) entered into in a recognized stock exchange in India and being such a transaction,
which is chargeable to Securities Transaction Tax, shall be exempt from tax.
3. Exemption of Long Term Capital Gain under Section 54EC
According to the provisions of section 54EC of the Act and subject to the conditions
specified therein, capital gains not exempt under section 10(38) and arising on transfer
of a long term capital asset shall not be chargeable to tax to the extent such capital
gains are invested in certain notified bonds, subject to a ceiling of Rs. 50 lakhs, within
six months from the date of transfer. However, if the said bonds are transferred or
converted into money within a period of three years from the date of their acquisition,
the amount of capital gains exempted earlier would become chargeable to tax as long
term capital gains in the year in which the bonds are transferred or converted into
money.
4. Exemption of Long term Capital Gain under Section 54F
According to the provisions of section 54F of the Act and subject to the conditions
specified therein, in the case of an individual or a Hindu Undivided Family (‘HUF’), gains
arising on transfer of a long term capital asset ((not covered by sections 10(36) and
10(38)) and not being a residential house) are not chargeable to tax if the entire net
consideration received on such transfer is invested within the prescribed period in a
residential house. If only a part of such net consideration is invested within the
prescribed period in a residential house, the exemption shall be allowed proportionately.
For this purpose, net consideration means full value of the consideration received or
accruing as a result of the transfer of the capital asset as reduced by any expenditure
incurred wholly and exclusively in connection with such transfer.
5. Rebate under Section 88E
Section 88E provides that where the total income of a person includes income
chargeable under the head “Profits and gains of business or profession” arising from
taxable securities transactions, he shall get rebate of Securities Transaction Tax paid by
him in the course of his business. Such rebate is to be allowed from the amount of
income tax in respect of such transactions calculated by applying average rate of income
tax.
6. Lower Tax Rate under Section 111A on Short-Term Capital Gains
As per the provisions of section 111A of the Act, short-term capital gains on sale of
equity shares where the transaction of sale is chargeable to Securities Transaction Tax
shall be subject to tax at a rate of 15 per cent (plus applicable surcharge and education
cess).
7. Lower Tax Rate under Section 112 on Long-Term Capital Gains
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