Taxation of portfolio investments by FIIs referred to GAAR panel
30 Jul 2012
The committee headed by Parthasarathy Shome, which is engage in a widespread consultations for finalising the guidelines on the General Anti Avoidance Rules (GAAR) has been entrusted with the additional issue of taxation of portfolio investment.
The issue relating to the taxation of portfolio investment, particularly in the context of the amendment made to the Income Tax Act relating to the taxation of non-resident transfer of assets where the underlying asset is in India, lacked necessary clarity on the tax liability, according to foreign institutional investors.
FIIs have sought clarification on amendments to the I-T Act, particularly in the case of investment made through a registered stock exchange in accordance with SEBI guidelines and purely in the form of portfolio investment.
The issue has been referred to the GAAR committee because any clarification needs to be harmonised with the GAAR guidelines and will have to address any residual concerns outside of GAAR.
