FII Benefits Extended to More Investors
What may come out to be a very encouraging decision to the foreign investors, the income tax authority of the country will treat all the foreign portfolio investors (FPIs) who are in hold of not more than 10 per cent shares in Indian companies, on par with Foreign Institutional Investors (FIIs). This makes them automatically eligible to pay lower taxes, here in India.
Sebi, the market regulator that governs the transactions of shares in the country has allowed evenhanded tax treatment for all entities which qualify as FPIs other than FIIs.
The decision also includes their sub-accounts and Qualified Foreign Investors (QFIs) which may include foreign central banks and sovereign wealth funds.
It was in the month of October that the market regulator took to streamlining the registration process for foreign investors and included investors from overseas in the category of FPIs if their share holding doesn’t go beyond 10 per cent.
And, with the nod being received from the economic affairs and income tax department of the country, the entities which qualify as FPIs will enjoy all the benefits as the latter. This includes many benefits, namely, not to have to hold on to tax deducted at source (TDS), in fact, these entities can pay advance tax now.
Along with this, Sebi, in its board meeting which was held on Tuesday, also consented new rules regarding search and seizures operations on premises, where a significant chance of finding convicting documents lies, which can in turn help the regulatory body in its investigation process.
The regulator informed that new rules are framed on the framework of the provisions mentioned in the Income Tax Act, 1961.