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Income Tax Act changes not to hurt FDI: SS Palanimanickam
May, 05th 2012

The government has said its proposal to amend the Income Tax Act with retrospective effect to tax Vodafone-type merger and acquisition deals will not hurt foreign investment. "These (Income Tax Act) amendments will not have any impact on foreign investment flow in the country," the minister of state for finance SS Palanimanickam told the Lok Sabha in a written reply.

Moreover, the minister added, as proposed changes in the Income Tax Act, 1961 are only clarificatory in nature they, "will not override the provisions of Double Taxation Avoidance Agreements with 82 countries, which are relevant for taxation of non-residents in the case of offshore mergers and acquisitions".

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