Latest Blogs from SBS and Company LLP

    Treatment of Income on Sale of Shares in ESOP Scheme – Perquisite or Capital Gain?

    Legislative Background:

    As per Section 15(1) of Income Tax Act, 1961 (Act) any salary due from employer or former employer to an assessee in the previous year, whether paid or not, is chargeable to tax under the head ‘Income from Salaries’. As per Section 17(1)(iv) of the Act, ‘salary’ includes ‘perquisites’ or ‘profit in lieu of salary or wages’.

    Section 17(2)(vi) of the Act, the term ‘perquisite’ includes the value of specified securities which were granted under ESOP or sweat equity shares allotted or transferred, directly or indirectly, by employer or former employer, free of cost or at concessional rate to the assessee.

    Section 45(1) of Income Tax Act, 1961 provides for taxability of profits or gains on transfer of Capital Asset in the year of transfer. The term ‘transfer’ inter-alia includes any transfer allowing the possessing of immovable property in part performance of contract referred to in 53A of Transfer of Property Act, 1882 (‘TOPA’).

    Sec 53A of TOPA protect the interest of the transferee in case where he as part of contract has performed his part either in full or part and any enjoying the possession of the property pending registration.


    Ambit of 29A of IBC – Decoding ArcelorMittal v Satish Kumar Gupta

    The recent judgment of the apex court in the case of ArcelorMittal India Private Limited vs Satish Kumar Gupta and Others has revealed the true ambit and intent of Section 29A of Insolvency and Bankruptcy Code, 2016 (IBC). Section 29A has been introduced with effect from 23.11.17 to restrict persons who are not eligible to become resolution applicants.



    All are aware that the provisions of the Companies Act, 2013, came in to force with effect from 12.09.2013, and with other provisions notified in a phased manner from 01.04.2014. 

    With in a period of 15 months of the commencement, on the pretext of ease of doing business in India, and to overcome some practical difficulties as to implementation of the provisions, some amendments were proposed to the Companies Act, 2013, and accordingly, the Companies Amendment Act, 2015, and the provisions of the same were made effective from 29.05.2015, in a phased manner. 



    External Commercial Borrowings (ECB) are governed by Foreign Exchange Management (Borrowing or Lending in Foreign Currency) Regulations, 2000 issued by Reserve Bank of India (RBI), and these regulations have been amended from time to time considering changes in India’s macro-economic scenario.  Apart from issuing Regulations, RBI has been issuing Master Directions on various aspects connected with foreign exchange management by consolidating related Notifications and AP (DIR Series) Circulars.   Master Direction No. 5 on External Commercial Borrowings, Trade Credits, Borrowing and Lending in Foreign Currency by Authorized Dealers / Persons other than Authorized Dealers was issued on January 1, 2016, and RBI has been amending the same in line with amendments to related Regulations, Notifications and new AP (DIR Series) Circulars.  

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