New Delhi:
Foreign portfolio investors will lose a preferential tax rate on interest from Indian government securities and corporate and foreign currency bonds, a senior tax official said Saturday.
Since 2013, foreign portfolio investors have enjoyed a lower tax of 5% on interest on bonds, making investment in the country more attractive. If they end this treatment, they will have to pay 20% tax on interest income from July 1.
“It has not been renewed,” Nitin Gupta, chairman of the Central Board of Direct Taxes, told Reuters. “Our position is that it was revenue foregone by the government
“We have a certain tax treaty with each jurisdiction that allows the Indian government to withhold tax at a certain rate. We had waived that right. It helped the other government and the other jurisdictions,” Gupta said in an interview.
The exemption will not benefit any Indian company, he said.
Gupta said regular registration by charities will help India collect beneficial ownership data and meet the standards of the Financial Action Task Force, a global money laundering and terrorism watchdog.
The task force, which is assessing India this year, is “deeply concerned about trusts as it becomes a route … for illegal activities, money laundering,” he said.
India’s $550 billion budget, unveiled on Wednesday, proposes a range of changes for charities, including regular registration to access tax breaks.
(This story has not been edited by DailyExpertNews staff and is auto-generated from a syndicated feed.)
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