Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: due date for vat payment :: ACCOUNTING STANDARD :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: empanelment :: VAT RATES :: ACCOUNTING STANDARDS :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: form 3cd :: list of goods taxed at 4% :: cpt :: TAX RATES - GOODS TAXABLE @ 4%
 
 
« News Headlines »
 GST Council fails to break deadlock over indirect tax regime, next meet on Dec 11 and 12 to hammer out differences
 Invoking Writ Jurisdiction For Income Tax Matters
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government
 Deadline to pay property tax in old currency extended
 Cabinet clears amendments to Income Tax Act

Interest on withheld ECBs may be taxed
January, 19th 2008
That moderating capital flows into the country is expected to top the agenda for Budget 2008-09 is clear from the finance ministrys plans to tax the interest earned on external commercial borrowings (ECBs).

This would make foreign debt more expensive and help moderate the surplus on the capital accountexpected to touch $103 billion in this fiscal, against an initial estimate of $58 billion. ECBs were the largest component of this.

Sources said the government has been considering the tax for quite some time. In the meantime, it had resorted to sterilisation of excess capital inflows. However, high domestic interest rates continue to make India an attractive and lucrative destination for global capital funds.

The government feels the forthcoming Budget, just a few weeks way, would be a good time to announce the decision on the proposed tax.

Even the Prime Ministers Economic Advisory Council review of the economy has acknowledged the need to limit the flow of ECBs. Since the pressure on the rupee to appreciate is likely to continue in the immediate future, clear signals should be given to the Indian industry to make adjustments through productivity increases and to tap the booming domestic market, it said.

Companies have to park their ECB funds abroad until they are ready to use them for the specific projects for which the money have been raised. The finance ministry now proposes to tax the interest that accrues as interest on this sum.

Commenting on the possible levy, Mukesh Butani, partner, BMR& Co, said, This can be a short-term measure, the aim of which will obviously not be to garner resources. But the government, while imposing such a tax, must spell out the important milestones on the achievement of which this tax will be withdrawn.

Arvind Virmani, chief economic adviser in the finance ministry, has also recommended imposing a tax on the interest paid on ECBs and auctioning such debt.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Company Search Engine Optimization Company US SEO Local SEO Company Website SEO Company Alabama SEO Company Alaska SEO Company Arizona SEO Company Arkansas SEO Company California SEO Company Colorado SEO Company Connecticut SEO Company Delawa

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