FinMin to soon clarify on withholding tax on masala bonds

MUMBAI: Amid confusion over the applicability of withholding tax on the rupee-denominated overseas bonds, a senior Finance Ministry official today said a clarification will be issued soon.

"We will shortly clarify (on withholding tax)," Manoj Joshi, Joint Secretary at the Department of Economic Affairs told reporters on the sidelines of a capital markers event here this evening.

Asked whether it is going to be 5 per cent, he did not give a direct answer.

It can be noted that mortgage lender HDFC, which has been among the first to announce such a bond issue, has said it is awaiting clarity on withholding tax.

The mortgage major's board had yesterday given an in- principle nod to raise up to $750 million by issuing `masala bonds' or rupee-denominated bonds.