Budget 2020 | Government moots cut in withholding tax

Finance Minister’s proposal is aimed at boosting listing of bonds at IFSC exchange

February 01, 2020 10:48 pm | Updated February 02, 2020 10:15 am IST - NEW DELHI

AHMEDABAD : GUJARAT : 01/02/2020 : (THIS FILE PICTURES FOR UNION BUDGET 2020 RELATED STORY) A Man passed near Solar panels at GIFT City in Gandhinagar. Photo : Vijay Soneji / The Hindu.

AHMEDABAD : GUJARAT : 01/02/2020 : (THIS FILE PICTURES FOR UNION BUDGET 2020 RELATED STORY) A Man passed near Solar panels at GIFT City in Gandhinagar. Photo : Vijay Soneji / The Hindu.

With an aim to boost listing of bonds at IFSC exchange, the government has proposed to reduce the withholding tax rate to 4% from 5% on interest payment on bonds listed on the bourse.

The move will attract more international investors to IFSC exchange.

“In order to incentivise listing of bonds at IFSC exchange, I propose to further reduce the withholding rate from 5% to 4% on interest payment on the bonds listed on its exchange,” Finance Minister Nirmala Sitharaman Sitharaman said in her Budget speech.

India International Exchange (India INX) MD and CEO V. Balasubramaniam said the Budget announcement will be “an immense boost to all issuers and immensely help them in attracting more international investors.” Withholding tax is levied by countries on interest or dividends paid to a person who is resident outside that country. India INX has already listed medium-term note (debt) programme worth $47 billion (about ₹3.33 lakh crore) with drawdown of $18.5 billion till date.

“This announcement should greatly incentivise issuers to choose India INX as the preferred platform for listing their international bonds and masala bonds,” he added. India‘s only International Financial Services Centre (IFSC) is in GIFT City, near Ahmedabad in Gujarat.

GIFT City is a global financial and IT services hub, a first-of-its-kind in India, designed to be at par with globally benchmarked business districts. It is supported by state-of-the-art infrastructure encompassing all basic urban infrastructure elements along with an excellent external connectivity.

Companies from financial services, technology and all other services sector are targeted as potential occupants within the city.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.