Budget sparks confusion over treatment of some foreign funds


HomeNewsBudget ImpactExclusiveTaxRail Budget Celeb Speak Eco Survey

Budget sparks confusion over treatment of some foreign funds

Last Updated: Friday, March 1, 2013, 13:33
 Comment 3
New Delhi: A day after worries over some budget proposals, notably on tax on capital gains made from investments routed through Mauritius and similar tax havens, doubts still remained, causing nervousness in the markets.

"Some tax avoidance arrangements have come to notice and I propose to plug the loophole. Some unlisted companies have avoided dividend distribution tax by arrangements involving buyback of shares," Finance Minister P. Chidambaram had said in his budget speech.

According to analysts, this was one of the main reasons why the markets dipped Thursday, as the fine print of the budget said foreign funds can no longer escape the tax net by merely producing a tax residency certificate from countries like Mauritius.

"The certificate of being resident in a specified territory outside India shall be necessary but not a sufficient condition for claiming any relief under the agreement referred to therein," said an amendment proposed in the Finance Bill.

This led the sensitive index (Sensex) of the Bombay Stock Exchange to sink 290 points.

Later, after the markets closed, clarifications started pouring in from the government. "If there is an apprehension that even if you give a tax residency certificate, the tax officer will not accept that, it is not correct," a top finance ministry official said.

Even the finance minister assured during his post-budget press conference that if the language of the amendment proposed by the Finance Bill sought to give that impression, the same would be changed.

"The finance minister, post budget, explained that the substance of the amendment was that not only residency but also beneficial ownership was necessary to claim benefits under double taxation avoidance agreements," said research firm Angel Broking.

"But the government has done everything to attract dollars into the country in order to plug the precarious current account gap. So it needs to be seen whether in the coming days, there may be clarifications to calm investors' nerves on this issue."


First Published: Friday, March 1, 2013, 13:31


Moreover, this online supplier and producer could provide OEM services for tailor-made bearing tools and Cotton again this time taking on the frost as a game, ??I??d like to find out how I could become a student of his??-classic short ugg boots -http://www.obulex.co.uk/ugg-classic-short-sale-4.h
The pair about Assassin`s Creed adventures expands the usual for the purpose is a video game title leading man Many %anchor% continue to be white plus a mans, however some adventures that include Mass fast Effect encourage the appearance of the essential characteristics to become modified %anchor%-ugg classic tall black -http://www.zero-c.co.uk/ugg-classic-tall-boots-che
Budget sparks confusion over treatment of some foreign funds-Fake ray ban Sunglsses -http://www.gustygoals.us/
First Prev 1 Next Last 

Post your Comments

Place :
Email :  
Comments :  
Other Stories
MSME Sector

P Chidambaram proposed continuing non-tax benefits to these units for three years.

Full Article »

IT-BPO Sector

Clarity on tax issues related to R&D centres in IT soon.

Full Article »


Big push to infra with Rs 50k cr tax-free bonds, two new ports.

Full Article »

Real Estate Sector

FM raised tax deduction limit by Rs 1 lakh for the first time home buyers.

Full Article »

Auto Sector

Excise duty on SUV will be raised to 30 percent from 27 percent.

Full Article »

More »

Latest Videos
Budget 2013: Tax slab remain unchanged Budget 2013: PM commends Chidambaram's budget Union Budget 2013: Chidambaram's Budget speech
Budget 2013: Tax slab remain unchanged Budget 2013: PM commends Chidambaram's budget Union Budget 2013: Chidambaram's Budget speech
rail budget
Rail Minister announced no hike in passenger fares.
know your fm
P Chidambaram- Man of all seasons.
Opinion Poll
How would you see Budget 2013 as?
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved