sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Sales Tax »
 Clarification on Cash sale of agricultural produce by Cultivators/Agriculturists
 Short-term capital gains are taxable at income tax slab rates in the year of sale
 India imposes regressive nationwide sales tax
 Modification of Circular No.1 of 2014 in view of substitution of Service Tax by Goods and Services Tax (GST).
 Assam government to dismantle all sales tax check-gates post Goods and Services Tax
 Income tax: How to calculate capital gains tax on sale of old jewellery
 Six arrested for posing as Sales Tax officers, extorting money
 Insurance Agency Mergers and Acquisitions in Q1 "Explode," OPTIS Partners' Report Reveals
 Sales tax sleuths raid spare parts shops in Meerut's infamous Sotiganj market
 Income Tax: How offshore income could be taxed twice
 India finalises bills to launch new sales tax in July

Banks request clarity on tax treatment over bonds under Basel norms
October, 07th 2014

Bankers have sought clarity from the Finance Ministry regarding taxation of additional tier-I bonds through which they are expected to raise capital to meet Basel III norms.

Clarity on taxation would help investors in putting money into such instrument without hesitation.

Banks have requested the Ministry to clarify tax treatment issues with regard to additional tier-I bonds in a meeting held recently, sources said.

Sources said bankers in the meeting said that investors want to know whether these instruments will be treated as bonds or equity for taxation purposes.

Under the Basel-III norms, additional tier-I bonds come with loss absorbency features meaning that in case of stress, banks can write off such investments or convert them into common equity if approved by the RBI.

This will help banks to conserve capital at the time of stress or loss.

Additional Tier I bonds, which qualifies as core capital or equity capital, is one of the means of raising capital by the public sector banks which would require Rs 2.40 lakh crore by March 2019.

Besides, investors also want clarity if they have option to exit such an investment after a few years.

Only few banks, including Bank of India, have raised funds through this instrument.

Some of the regulators, including pension regulator (PFRDA), have also raised issues on the taxation structure of these bonds.

However, PFRDA recently permitted pension fund managers to invest in Basel III compliant Tier I bonds of banks.

"It is hereby clarified that additional Tier I bonds compatible under Basel III issued by scheduled commercial banks in accordance with the RBI guidelines are to be considered as debt instruments eligible for investments under the debt category of all NPS schemes provided they are rated as investment grade by at lease one rating agency," PFRDA had said in a notification.

Tier I bonds are instruments which are perpetual in nature and therefore are akin to shares.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Privacy Policy

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions