For Quick Alerts
For Daily Alerts

Foreign banks' WoS to be exempt from capital gains tax: RBI

By Religare
Foreign banks' WoS to be exempt from capital gains tax: RBI
The Reserve Bank of India (RBI) said that the foreign banks will not have to pay stamp duty and capital gains tax if they convert their branch operations into a wholly owned subsidiary.

"In this context... 'Special Provisions relating to Conversion of Indian Branch of a Foreign Bank into a Subsidiary Company' in Income Tax Act, 1961, inter alia, exempting capital gains arising from such conversion from capital gains tax, with effect from April 1, 2013," RBI said in a release.

Foreign banks have been hesitant of local incorporation fearing tax and stamp duty liabilities. The central bank has been encouraging foreign lenders in India to operate through wholly owned units rather than branches so that the domestic banking system is insulated from any turmoil in overseas financial markets.

Foreign bank desirous of converting their branches into wholly owned subsidiaries may take into account the above developments, the RBI said. There were 43 foreign banks in India with a network of 333 branches as of March 2013. At present, foreign banks have presence in India only through branches.

Dion Global Solutions Ltd.

Company Search
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more