CBDT notifies ‘Bullion Depository Receipt with underlying bullion’ for Sec. 47(viiab) exemption

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Bullion Depository Receipt

Notification No. 89/2022, dated 03-08-2022

Section 47(viiab) of the Income-tax Act provides that any transfer of capital assets by a non-resident on a recognised stock exchange located in any IFSC is not treated as transfer provided the consideration is paid or payable in foreign currency. The section list down the following capital asset for the purpose of exemption:

    • Bonds or GDRs as referred to in Section 115AC(1);
    • Rupee Denominated Bond of an Indian company; and
    • Derivative.

Section 47(viiab) also empowers the Central Government to notify securities that shall be eligible for the benefit. Exercising the power, the Central Board of Direct Taxes (CBDT) issued notification number S.O. 986(E), dated 05-03-2020, notifying the following 5 securities for section 47(viiab):

i. Foreign currency denominated bond;
ii. Unit of a Mutual Fund;
iii. Unit of a business trust;
iv. Foreign currency denominated equity share of a company; and
v. Unit of Alternative Investment Fund.

Now, the board has amended its earlier notification to include another security in such list. The CBDT has notified that ‘Bullion Depository Receipt with underlying bullion’ shall be eligible for the benefit of section 47(viiab).

Click Here To Read The Full Notification

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