Finmin may Reduce Withholding Tax for FIIs
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.