Finmin may Re­duce With­hold­ing Tax for FIIs

The Economic Times - - Economy -

To spur for­eign in­vest­ment in the cor­po­rate bond mar­ket, the fi­nance min­istry has pro­posed re­duc­tion in with­hold­ing tax for FIIs to 5% from 20% at present. As the min­istry braces up for a new min­is­ter, the cap­i­tal mar­kets di­vi­sion would also make a case for deep­en­ing the cur­rency de­riv­a­tives mar­ket and make it eas­ier for FIIs to hedge risks. These sug­ges­tions will be placed be­fore the new min­is­ter. In a note pre­pared for the new govern­ment, the min­istry has pro­posed cut­ting with­hold­ing tax for FIIs in non-in­fra­struc­ture cor­po­rate bonds to 5%, thus favour­ing uni­form with­hold­ing tax for all FIIs in­vest­ing in cor­po­rate bonds.

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