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New Delhi, Sep 19 (IANS) In a bid to attract off-shore funds to set up their base in India, the Centre has proposed tax incentives or foreign funds who decide to shift their base to International Financial Services Centre (IFSC) at the Gujarat International Finance Tec-City (GIFT City).
The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 tabled in the Parliament proposes amendments to the Income Tax Act and as per the proposed amendments profits and business income earned by such funds based in GIFT City will be exempted from tax.
The Bill proposes amendments to the Income-tax Act, 1961 which, inter alia, include providing of tax incentive for Category-III Alternative Investment Funds located in the IFSC to encourage relocation of foreign funds.
The proposed relaxations are in line with the rules in several other countries including Singapore, according to experts.
In another major relief for foreign portfolio investors, the bill also proposes to cap the surcharge on dividend income from FPIs with a trust structure at 15 per cent.
Currently, FPIs that operate as trusts have to pay a surcharge as high as 37 per cent if their dividend income is over Rs 5 crore and 25 per cent in case of a dividend income of Rs 2 crore and Rs 5 crore, following measures in the 2019-20 budget.
--IANS
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