Section 193 - Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer
The concessional regime is narrow: employee status, issuer activity, notified ESOP scheme, foreign-currency purchase and GDR character must all be evidenced.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Current law and effective date
Section 193 is controlled against the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The Act and Income-tax Rules, 2026 operate from 1 April 2026; earlier years and saved proceedings require the repeal-and-savings framework rather than automatic migration.
Primary statute: Income Tax Department consolidated Act | Rules: Notified Income-tax Rules, 2026
2-minute decode
The concessional regime is narrow: employee status, issuer activity, notified ESOP scheme, foreign-currency purchase and GDR character must all be evidenced.
Who should use this section
Eligible employees / residents with qualifying foreign-currency GDR dividend or long-term capital-gain income under the narrow statutory regime.
Old-law bridge
section 115ACA
The old-law bridge is navigational, not automatic precedent transfer. Match the 1961 Act wording, saved proceedings, current 2025 Act text and effective date before importing an older interpretation.
Finance Act 2026 / current-law note
No section-specific Finance Act, 2026 textual substitution is separately flagged for section 193; the consolidated post-Finance-Act-2026 text remains the controlling version and must be used instead of pre-1 April 2026 extracts.
Professional alert
Verify notified employee stock option scheme and GDR documentation. Trace foreign-currency acquisition and employee/subsidiary status. Segregate dividend, long-term gain and ordinary income.
Connected Income-tax Rules, 2026 and Forms
| Rule | Current control | Form |
|---|---|---|
| No provision-specific Rule/Form is directly prescribed for this section in the mapping used here. Apply the statute directly and check the current Rules where another provision cross-refers to them. | ||
Worked application
A resident employee receives ₹2 lakh GDR dividend and ₹5 lakh qualifying long-term gain. Those buckets are taxed separately at 10% and 12.5%; other income remains under normal rates.
Evidence / compliance checklist
- Verify notified employee stock option scheme and GDR documentation (section 193 evidence control 1).
- Trace foreign-currency acquisition and employee/subsidiary status (section 193 evidence control 2).
- Segregate dividend, long-term gain and ordinary income (section 193 evidence control 3).
Common mistake
A common section 193 error is to apply the old-law label or headline rate without rebuilding the current statutory conditions. For “Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer”, the safer control is to test the exact taxpayer/transaction facts, the operative tax year, every linked Rule/Form and the Finance Act 2026 consolidated wording. Verify notified employee stock option scheme and GDR documentation. Trace foreign-currency acquisition and employee/subsidiary status. Segregate dividend, long-term gain and ordinary income.
Recommended approach
For section 193, start with the legal trigger in “Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer”, document the evidence for that trigger, then run the computation or procedural step against the current text. As a cross-check, verify this provision-specific checkpoint: Qualifying GDR dividend bucket: 10%.
Thresholds, periods and timing checkpoints
- Qualifying GDR dividend bucket: 10%.
- Qualifying long-term capital-gain bucket: 12.5%.
Related provisions and interaction map
Section 193 operates inside Chapter XIII special-rate computation; reconcile its particular tax bucket with the relevant capital-gains, unexplained-income or corporate-regime rules, plus surcharge, cess, return and loss-set-off provisions.
Provision summary - verify verbatim text in the official Act
Text-status note: This guide does not reproduce the complete verbatim provision for section 193. Use the linked official consolidated Act before quoting sub-section language or preparing a filing, opinion or litigation document.
Primary-source trail
Statute: Income-tax Act, 2025 as amended by Finance Act, 2026
Rules: Income-tax Rules, 2026
Law navigation: Income Tax Department 2025 Act / Rules hub
Quoting note: Use the official consolidated Act for verbatim legislative language.
FAQs
Does an old Income-tax Act, 1961 case automatically decide section 193?
No. The old-law bridge helps research, but transferability depends on materially matching language, transition rules and any Finance Act 2026 change.
Which text should be quoted in advice or litigation?
Quote the consolidated official statute for the relevant tax year. If this page presents a provision summary rather than complete statutory text, use the official consolidated Act for verbatim legislative language.