TAX IMPLICATIONS FOR FPIS
Scrap, cut or tweak? Centre weighs options on LTCG, STT to stem foreign investor exodus
The Centre is weighing proposals to scrap or lower long-term capital gains tax and recalibrate securities transaction tax as it seeks to address foreign investor outflows. Market participants have favoured scrapping LTCG on equities and selectively raising STT on options, while regulators are understood to support removing LTCG to attract overseas capital.
Lowering LTCG isn't a magic bullet
A reduction in Long-Term Capital Gains (LTCG) tax could uplift sentiment in India's equity market, especially as foreign investors withdraw. The current landscape is shaped more by external economic influences than tax adjustments. The reinstatement of LTCG has rendered India less appealing compared to rivals like Hong Kong and Singapore. A strategically planned tax cut may provide clearer policy stability for investors while preserving fiscal responsibility.
Good intentions, unintended consequences: The cost of regulation
Regulation is vital for protecting consumers and building trust, but unpredictable or poorly calibrated policy changes can disrupt business economics, valuations and investment.
Tax matters, as does capital: Is it time for India to reconsider its LTCG tax policy on listed equities amid rising global competition?
Debate on long-term capital gains (LTCG) tax and securities transaction tax (STT) has gained momentum, with the government recognizing its significance. With foreign portfolio investors withdrawing substantial funds from Indian equities, the impact of tax regimes on investment behavior and market liquidity warrants deeper analysis. Reforms are necessary to enhance India's competitiveness in attracting global capital.
ET Prime Special Series: Multibagger or IBC - Part 81: Momentum in numbers will decide fate of this auto ancillary's stock
A few years back, the important question for this auto ancillary supplier was whether its investments and customer programmes would begin producing enough revenue. Today, the numbers look very different. Annual income has jumped, exports have risen, and a large overseas-linked order has helped deliver a record quarter. How much of the improvement is repeatable, and how much reflects an unusual opportunity?
FPIs lobby for faster access to bourses with link to servers
The proposal - put forward by persons representing large offshore funds and custodians at a recent meeting with officials of the Securities and Exchange Board of India (SEBI) and the finance ministry - implies that buy or sell orders would flow directly from an FPI server to the exchange instead of being routed through a broker's co-location server.
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What Tiger Global ruling means for foreign investors
A Supreme Court ruling impacts foreign investors in India. Investors can no longer use only a Tax Residency Certificate for tax benefits. Tax authorities will now examine the business substance of overseas investment structures. This affects private equity and other foreign portfolio investors, particularly those using Mauritius and Singapore.
India mulls tax exemption for sovereign wealth funds’ equity gains amid heavy foreign outflows
India may exempt Sovereign Wealth Funds and patient capital from taxes on Indian stock market earnings. This proposal aims to attract stable foreign investment following significant sell-offs by foreign fund managers. The government is examining extending these benefits to other long-term investors like pension funds. Such a move could boost capital inflows into the Indian equity market.
Income Tax department mulls probe into Jane Street after SEBI allegations of market manipulation
Following SEBI's allegations of market manipulation against Jane Street, the Income Tax department is considering a probe into potential violations. The investigation will focus on General Anti-Avoidance Rules (GAAR) and permanent establishment norms, examining the firm's structure involving Indian and offshore entities. Authorities suspect profits booked in Singapore may be reattributed to India, leading to significant tax implications.
FPIs pull out Rs 22,400 crore so far in November, selling pressure continues
FPIs have continued their bearish stance on Indian markets in November, pulling out Rs 22,420 crore. While they sold Rs 32,351 crore in the secondary market, they invested Rs 9,931 crore in the primary market. FPIs have also turned cautious on Indian debt markets, with outflows reaching Rs 4,717 crore.
FPIs quizzed on 'loans' for trading
It's unclear why the information was sought, but the Income Tax (I-T) department has directed these offshore funds to disclose the identities of the lenders, the latter's source of money, and the nature of agreement between the two parties. The move to fish out such information could well be to trace any possible and indirect links between overseas portfolio managers with Indian companies and promoters, feel some of the tax and finance professionals.
Sebi tweaks operational guidelines for FPIs, depository participants
According to the regulator, the framework has been modified pertaining to certificate of registration for FPIs and change in their name.
FPIs seek tax clarity on variable capital companies in financial centres
Among other benefits, the VCC structure allows funds some concession from short-term and long-term capital gains tax on returns on equities. The onus of paying tax, as per the standard VCC structure, falls on the investors in these entities.
Centre, Sebi eye rule tweaks to ready budget GIFT for FPIs
Sebi regulations currently restrict foreign funds looking to shift base to India. To do so, they would have to sell their portfolios and buy them back through the Indian arms, something that would lead to short-term and long-term capital gains tax implications of 10-15%, experts estimate.
Banking, fin services, energy & IT see massive FPI offloading
FPI outflow from energy stocks was Rs 4,400 crore while from NBFCs was Rs 3,900 crore.
‘Public’ offshore funds may get relief on proposed tax on indirect transfers
Move will benefit nearly 2,000 FPIs who own 15-20 per cent of total FPI assets.
Mauritius in FATF 'grey list'; worried banks, fund advisors knock SEBI's doors
Sources said Mauritius is tapping diplomatic channels to preserve its position as a tax haven.
Runup to the Budget 2020-21: Govt mulls no tax on LTCG with 2-year holding period
The government may also tweak the definition of ‘long term’ from a year to two years.
Tax rates more competitive and better aligned to global standards now: Gokul Chaudhri, Deloitte Touche Tohmatsu India LLP
Govt has delivered a rather bold set of measures which will incentivise corporate India to start investing.
Why new tax surcharge has stunned foreign portfolio investors
The business entities known as Association of Persons have been stunned by new surcharge.
FPIs mull going 'corporate', but the change won’t be easy
There has been an outcry among FPIs after the budget announcement.
FPIs infuse over Rs 22,000 crore in January on better earnings expectations
In the entire 2017, FPIs put in a total Rs 2 lakh crore in equity and debt markets.
Mutual funds pull ahead of FPIs in stock investment
This comes on the top of over Rs 51,000 crore investment in stocks in 2016-17.
India's securitisation market set to grow further: Moody's
Moody's Investors Services said the participation of foreign investors through the new FPI rules will help the Indian market evolve so that it becomes more in line with global practices.
FPIs pull out Rs 6,000 crore from debt market in May
The data sourced from the depositories showed FPIs have sold debt securities worth Rs 5,986 crore (USD 891 million) till May 27.
Finance Ministry meets foreign investors; discusses GAAR, tax treaties
The meeting came amid concerns being expressed by tax experts about the taxation of P-Notes and the impact which the treaty revision can have over investments from other countries.
London based Investment Association, ASIFMA seeks to be party in Castleton case over MAT
The income-tax department issued notices to FPIs asking them to pay MAT for prior years, prompting worries about an arbitrary tax regime.
AP Shah panel seeks recommendations; to meet revenue officials, FPIs & analysts
All 68 FPIs that have received draft assessment orders from the revenue department have sought meetings with the committee.
Government offers DTAA relief to MAT-hit foreign investors
The assurances came during meetings and conference calls the foreign portfolio investors had today with Minister of State for Finance Jayant Sinha.
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