FIIs' participatory notes to be taxed in next budget: Shome

FIIs' participatory notes to be taxed in next budget: Shome
According to Parthasarathi Shome, advisor to Union Finance Minister, holders of participatory notes (PNs) issued by Foreign Institutional Investors (FIIs) might be taxed in the next budget, reported media.

"So far PNs issued by the FIIs to overseas investors were not taxed by the Income Tax department. But after deliberations in the finance department, the PN holders may be taxed in the next budget", Shome said at an interaction organized by ICAI.

He said that internationally, PN holders were taxed by countries where their investments were routed through FIIs.

Shome said the revised Direct Tax Code of 2013, the erstwhile practice of granting EEE (exempt, exempt, exempt) to savings at the time of investments, accruals and withdrawal had been retained as there was substantial opposition to the EET (exempt, exempt, tax) as proposed in the original DTC of 2009.

He had also supported the 35 per cent marginal tax slab for individuals and HUF for income for than Rs 10 crore or more per year.

According to him, this new tax rate had been introduced to impart equity in tax administration as well as to bring efficiency gains, added the media report.

Read more about: fii, participatory note
Story first published: Monday, April 7, 2014, 23:06 [IST]
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