gayatri projects limited - Edelweiss

GAYATRI PROJECTS LIMITEDTAX BENEFITSThe tax benefits listed below are the possible benefits available under the current tax laws in India. Several of these benefitsare dependent on the Company or its Shareholders fulfilling the conditions prescribed under the relevant tax laws. Hencethe ability of the Company or its Shareholders to derive the tax benefits is dependent upon fulfilling such conditions, whichbased on business imperatives it faces in the future, it may not choose to fulfill.The following tax benefits shall be available to the Company and the prospective shareholders under Direct Tax.1. To the Company - Under the Income-tax Act, 1961 (the Act)There is no additional benefit arising to the Company under The Income Tax Act, 1961, by proposed Initial PublicOffer of Equity Shares to the public and institution in India.2. To the Members of the Company - Under the Income Tax Act – Under the Income Tax Act, 1961 including theprovisions of Finance Act, 20062.1 Resident Membersa) Under Section 10(34) of the Act, income earned by way of dividend from domestic company referred to inSection 115-O of the Act is exempt from income-tax in the hands of the shareholders.b) Under Section 10(38) of the Act, long term capital gain arising to the shareholder from transfer of a long termcapital asset being an equity share in the company or unit of an equity oriented mutual fund (i.e. capital assetheld for the period of twelve months or more) entered into in a recognized stock exchange in India and beingsuch a transaction, which is chargeable to Securities Transaction Tax, shall be exempt from tax.c) In terms of Section 88 E of the Act, the securities transaction tax paid by the shareholder in respect of thetaxable securities transactions entered into in the course of the business would be eligible for rebate from theamount of income-tax on the income chargeable under the head ‘Profits and Gains under Business orProfession’ arising from taxable securities’ transactions.d) As per the provisions of Section 10(23D) of the Act, all mutual funds set up by public sector banks, publicfinancial institutions or mutual funds registered under the Securities and Exchange Board of India (SEBI) orauthorized by the Reserve Bank of India are eligible for exemption from income-tax, subject to the conditionsspecified therein, on their entire income including income from investment in the shares of the company.e) Under Section 54EC of the Act, capital gain arising from transfer of long term capital assets (other than thoseexempt U/Sec 10(38)) shall be exempt from tax, subject to the conditions and to the extent specified therein,if the capital gain are invested within a period of six months from the date of transfer in the bonds redeemableafter three years and issued on or after the 1 st day of April 2006 -1. National Highways Authority of India constituted under Section 3 of National Highways Authority of IndiaAct, 1988, and notified by Central Government in the Offical Gazette for purpose of this section; or2. Rural Electrification Corporation Limited, a company formed and registered under the Companies Act,1956; and notified by Central Government in the Offical Gazette for purpose of this section.If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. However, theamount so exempted shall be chargeable to tax subsequently, if the new bonds are transferred or convertedinto money within three years from the date of their acquisition.f) Under Section 54ED of the Act, capital gain arising from the transfer before the 1 st day of April 2006, of longterm capital assets, being listed securities or units (other than those exempt U/S 10(38)) shall be exempt fromtax, subject to the conditions and to the extent specified therein, if the capital gain is invested in public issueof equity shares issue by of an Indian Public Company within a period of six months from the date of suchtransfer. If only a part of the capital gain is so reinvested, the exemption shall be proportionately reduced.However, the amount so exempted shall be chargeable to tax subsequently, if the new equity shares aretransferred or converted into money within one year from the date of their acquisition.36