FIIs seek clarity on tax code
The new direct tax code is a ‘discussion document' and the government will consider the views of all constituents before turning it into a final tax rule.
By Partha Sinha, TNN |
MUMBAI: The new direct tax code is a ���discussion document' and the government will consider the views of all constituents before turning it into a final tax rule. As part of the process of taking industry views on the code, finance minister Pranab Mukherjee on Wednesday met with a host of domestic and foreign fund managers and took their feedbacks and suggestions on the new code.
Institutions, especially the FIIs, said they expected a long-term clarity on the tax rules relating to the stock market. ������FIIs said that it was important that taxation rules relating to foreign investors did not change frequently...this was important for getting long-term investors to India,'' said an official who attended the meeting in New Delhi.
About 20-25 representatives from large size domestic institutions and FIIs were called into the meeting that lasted nearly two hours, sources said. Among the institutions who met the finance minister were Barclays, Citigroup, DSP Merrill Lynch, Fidelity, ICICI Bank group, Kotak Mahindra Bank, Morgan Stanley, Reliance MF and UTIMF. ������The FM promised to have separate meetings with other stake holders in the market before finalising the tax code,'' said the official.
One of the main points of discussion was how the proposed long-term capital gains tax in the new code will be treated when investments are routed through countries like Mauritius and Singapore which have signed double tax avoidance treaties with India.
Under the proposed tax code, securities transaction tax (STT) will be abolished and tax on long-term gains will be brought back. The finance minister also expressed a strong desire to develop the bond market into a robust market place, something that a number of government-appointed committees have suggested earlier also. FIIs in particular suggested repo facilities to be allowed in the corporate bond market.
Institutional heads also suggested that the government to allow money from pension funds to be invested in the stock market.
The finance minister promised to examine these as well as all the other proposals which were made during the meeting.
������A lot of points relating to investments, market structure, regulations etc were raised during the meeting,'' said head of another institution who attended the meeting. ������FM's body-language was very impressive,'' he added.
Institutions, especially the FIIs, said they expected a long-term clarity on the tax rules relating to the stock market. ������FIIs said that it was important that taxation rules relating to foreign investors did not change frequently...this was important for getting long-term investors to India,'' said an official who attended the meeting in New Delhi.
About 20-25 representatives from large size domestic institutions and FIIs were called into the meeting that lasted nearly two hours, sources said. Among the institutions who met the finance minister were Barclays, Citigroup, DSP Merrill Lynch, Fidelity, ICICI Bank group, Kotak Mahindra Bank, Morgan Stanley, Reliance MF and UTIMF. ������The FM promised to have separate meetings with other stake holders in the market before finalising the tax code,'' said the official.
One of the main points of discussion was how the proposed long-term capital gains tax in the new code will be treated when investments are routed through countries like Mauritius and Singapore which have signed double tax avoidance treaties with India.
Under the proposed tax code, securities transaction tax (STT) will be abolished and tax on long-term gains will be brought back. The finance minister also expressed a strong desire to develop the bond market into a robust market place, something that a number of government-appointed committees have suggested earlier also. FIIs in particular suggested repo facilities to be allowed in the corporate bond market.
Institutional heads also suggested that the government to allow money from pension funds to be invested in the stock market.
The finance minister promised to examine these as well as all the other proposals which were made during the meeting.
������A lot of points relating to investments, market structure, regulations etc were raised during the meeting,'' said head of another institution who attended the meeting. ������FM's body-language was very impressive,'' he added.
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