Overseas investors seek more clarity in Indian tax laws says Deloitte: Budget 2011
February, 22nd 2011
Foreign investors are looking forward to more clarity in taxation laws in India, which is "a very attractive investment destination", according to tax experts at Deloitte.
"There is a good environment for investment in India. Foreign investors will like to see more clarity as well as certainty about the country's tax laws," Vijay Dhingra, Leader (India Desk) at Deloitte AP ICE, told PTI.
AP ICE is Asia Pacific International Core of Excellence, a group of tax experts from different countries.
India has embarked on plans to revamp the existing taxation system with the introduction of Direct Taxes Code (DTC) and Goods and Services Tax (GST).
DTC , which would replace the archaic Income Tax Act, would come into effect from April 1, 2012. Discussions are progressing with various states for the proposed GST that would come in place of state-level Value-Added Tax (VAT) and excise duty, among others.
Alan Tsoi, co-leader of Deloitte AP ICE and Asia Pacific M&A tax leader, said that foreign investors always look for stable, transparent and friendly investment environment, especially when it comes to tax system.
Dhingra and Tsoi, both of them based out of Hong Kong, noted that Indian tax regime is progressing in a positive direction and is "getting sophisticated".
India's exchange control regulations are also getting flexible, that makes it more easier for foreign investments to come into the country, Dhingra said.
Infrastructure, automotive, energy and telecom would be among the sectors that are likely to see more foreign investments in the near future, he noted.
Terming India as a "very attractive investment", Dhingra said that interest shown by foreign investors in the market is phenomenal.
On the investment climate between India and neighbouring China, Tsoi said it looks very healthy and flows are expected to increase in the near term.
In December, India saw foreign direct investment (FDI) worth about USD 2 billion. FDI stood at USD 25.88 billion in fiscal year 2009-10.