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
Direct Tax »
 Taxpayers Beware! Specifications in ITR Forms to make it difficult for assessees to stay indifferent
 Penalties for Late Filing of Income Tax Returns
 CBDT again defers GST Reporting in Tax Audit Report
 I-T officers to fast track disposal of appeal cases
 Indian residents can get credit of taxes paid outside country while filing ITR
 CBDT claims increase on tax data that suggests blip in e-filings
 Procedure, format and standards for issuance of certificate for tax deducted at source in Part B of Form No. 16 in accordance with the provisions of section 203 of the Income-tax Act, 1961 read with the Rule 31 of the Income-tax Rules, 1962 through TRACES
 Know All About Different ITR Forms and Important Due Dates
 CBDT gives I-T commissioners 3-month deadline to clear pending cases
 CBDT rejects report on decline in income tax e-filing
 Income tax returns shrink in FY19 as demonetisation effect wanes

FIIs may not abandon India due to tax treaty changes
June, 04th 2016

FIIs are unlikely to abandon India due to the tax treaty revision with Mauritius and foreign investment flow can actually increase for a few months as investors may take tax advantage by investing more before March 31, 2017 deadline, says a report.

"FIIs are unlikely to abandon India and its great long- term buys just because of a new clause added to the DTAA (with Mauritius). Worries on the same clause being added to the treaty with Singapore or other tax-havens are also not a big concern.

"It is the pedigree of the company rather than tax structure of the home country which makes a business a strong investment proposition," a report by Centrum Wealth Research said.

Mauritius and Singapore are among the top-most sources of foreign direct investments into India and together also account for a big chunk of total inflows into the country's capital markets .

"In the immediate term, India could see an increase in FII investments as FIIs may want to take the tax advantage and invest in Indian securities before the sunset date of April 1, 2017. Practically, looking at the potential of returns offered by the Indian market , this clarity on taxation is likely to lead to higher inflows of longer term money, thus bringing in stability in flows," it said.

While the move is aimed towards significantly reducing instances of treaty abuse, round tripping of funds and curb tax evasion, it could change investment flows between the two nations, Centrum Wealth said.

The report further said the new India-Mauritius treaty is likely to impact hot money, which comes into India with an investment horizon of less than a year.

Though these short-term FII flows add to the corpus of foreign money in the country, these come from investors who make a quick exit once their money is made. Hot money tends to increase volatility in equity markets, although it does inject liquidity into the market which leads to higher depth.

India's capital market has some great stories playing out, which deserve attention and global investment. Global investors will not be deterred by a 7.5 per cent or 15 per cent tax (only on short-term capital gains) from investing into names which have the potential to offer great returns in the future, as per the report.

"It does not seem like the Indian equity market has much to worry about. There is enough time for the new rules to come into play. By then the development is likely to be well absorbed and market participants, both global and domestic, would be better prepared to deal with life after April 1, 2017.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2019 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System developers CMS developers Content Management Solutions CMS Solutions CMS India Content Management System India CMS development India Website CMS Website Content Management India Portal CMS India CMS Outsourcing CMS Vendor Complete CMS Custom CMS Services

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