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

As per the provisions of Section 112 of the Act, long term gains that are not exempt
under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus
applicable surcharge and education cess). However, as per the proviso to Section
112(1), if the tax on long term capital gains resulting on transfer of listed securities or
units or zero coupon bond, calculated at the rate of 20 percent with indexation benefit
exceeds the tax on long term gains computed at the rate of 10 percent without
indexation benefit, then such gains are chargeable to tax at a concessional rate of 10
percent (plus applicable surcharge and education cess).
(iii) BENEFITS AVAILABLE TO NON RESIDENTS/ NON-RESIDENT INDIAN
SHAREHOLDERS (OTHER THAN MUTUAL FUNDS, FIIS AND FOREIGN VENTURE
CAPITAL INVESTORS)
1. Exemption under Section 10(34)
Under Section 10(34) of the Act, income earned by way of dividend from domestic
company referred to in Section 115-O of the Act is exempt from income tax in the hands
of the shareholders.
2. Exemption under Section 10(38)
Under Section 10(38) of the Act, long term capital gains arising out of sale of equity
shares or a unit of equity oriented fund will be exempt from tax provided that the
transaction of sale of such equity shares or unit is chargeable to Securities Transaction
Tax. However, the aforesaid income shall be taken into account in computing the Book
profit and income tax payable under section 115JB.
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
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.
6. Lower Tax Rate under Section 111A on Short-Term Capital Gains
60