Ruling on characterization of income from convertible debenture : a hybrid instrument

Abstract

In the case of LMN India Limited, the Authority for Advance Ruling recently issued a ruling dealing with the characterization of income arising from a category of hybrid instruments known as "compulsorily convertible debentures", or CCDs. This article considers the ruling in LMN India, as well as the relevant provisions of the Income Tax Act, 1961 and the India-United States income tax treaty.