Participatory notes holders may be taxed in next budget: Shome

Holders of participatory notes (PNs) issued by Foreign Instituitional Investors (FIIs) might be taxed in the next budget as it had been agreed by the finance department, advisor to Union Finance Minister Parthasarathi Shome said.

"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 organised by ICAI here today.

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% 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.

In countries like UK, Chile, Germany, South Africa and such marginal tax slabs were much higher.

In case of wealth tax, the revised DTC proposed that the the dividend distribution tax (DDT) for incremental dividend in excess of Rs one crore would be taxed in the hands of the shareholders.

Corporate tax would be retained at the 25% level, he said.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Sebi’s new listing norms should protect small investors

    There has been a long-standing debate on what should be the liability of individual promoters and directors in case a company does not meet its obliga

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Roopen Roy

Building smart cities the Indian way

Today more than half of the world’s population lives in ...

Rajgopal Nidamboor

The biology behind cultivated wisdom

We are our habits and our behaviour. We are our ...

Gautam Gupta

Why must innerwear be our best kept secret?

While women’s outerwear rules the marketing roost in India, unfortunately, ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture