Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
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
Popular Search: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: articles on VAT and GST in India :: form 3cd :: cpt :: VAT Audit :: due date for vat payment :: TDS :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4%
News Headlines »
 What to do if your TDS is not deposited with the government
 What if you forget to verify your Income Tax return?
 TDS on rent and other tax tasks to complete before March 31
 5 income tax changes which will come into effect from April 1, 2018
 Why you shouldn't be a last-minute tax filer
 How to calculate income tax for this assessment year on Moneycontrol
 6 Tax notices you may get and how to cope with them Income Tax Notice
 Deadline to pay advance tax ends tomorrow: Here is a step-by-step guide
  Central Goods and Services Tax (Second Amendment) Rules, 2018
 Income Tax Return Filing Deadline: Waiver On LTCG Tax To End On 31 March. Details Here
 Income tax returns (ITR) filing: Top mistakes that can be very costly

FIIs may have to pay tax on income from PNs
May, 17th 2008

About 30 foreign institutional investors (FIIs) are under the scanner of the income-tax department, which is exploring the possibility of claiming tax on income generated from trading of participatory notes, better known as P-Notes (PNs).

ABN Amro, Barclays Bank, CLSA Merchant Bank, Calyon, Citicorp Investment Bank, JPMorgan Securities, Goldman Sachs, Morgan Stanley, ICICI International, UBS and Deutsche International Trust Corporation are among those who have received notices from the income-tax department. These banking groups have been asked to provide details of their P-Note dealings.

PNs are offshore derivative instruments issued by FIIs registered in India to overseas investors, who have no direct access to the Indian stock market. At one point, PNs accounted for a third of the FII trading volumes in India.

However, business in participatory notes has dropped significantly since capital market regulator Sebi banned the issuance of PNs to unregulated foreign entities in November last year.

The tax authorities possibly feel that FIIs should withhold the tax amount while passing on the gains to PN holders. Most FIIs operating in India are registered in Mauritius with which India has a Double Taxation Avoidance Agreement (DTAA). Hence, these capital gains are not taxed in India. The question raised by tax authorities is: why should the tax exemption provided under the DTAA between India and Mauritius be extended to PNs?

The notices sent to FIIs may be seen in the context of the ones sent to Vodafone on its $11-billion acquisition of Hong Kong-based Hutchisons stake in Indian telecom major Hutch-Essar. In the Vodafone deal, though the transaction took place outside India between two overseas parties, the income-tax department thought it reasonable to claim tax on the deal.

The department feels it has the right to raise tax on the profit generated in India. The issue is currently pending before the Bombay High Court. The tax department has also sent notices to a few more companies on their cross-border acquisitions. An amendment in the last Budget seems to have emboldened tax authorities to claim tax on cross-border acquisitions.

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

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