2 min readNew DelhiOct 22, 2015 12:47 AM IST
First published on: Oct 22, 2015 at 12:47 AM IST
Domestic financial institutions urged the government on Wednesday to rationalise tax rules and introduce uniform Know Your Customer (KYC) norms to improve doing business in the country and enhance retail participation in the securities market.
In a meeting, chaired by economic affairs secretary Shaktikanta Das, domestic brokerage firms, mutual funds and stock exchanges also pressed for putting in place digital KYC for faster approvals, according to people who attended the meeting. Ahead of the Budget 2015-16, the meeting was called to discuss issues including integration of various segments of the market, increasing retail participation and deepening of the bond market.
“There were some suggestions and representation with regard to rationalisation of certain tax provisions. We have made a note… CBDT and CBEC officials were present. They will examine it… Let us see what can be done,” Das told reporters after the meeting.
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On Tuesday, in a similar exercise, the finance ministry officials had met the foreign portfolio investors (FPIs), who had also raised tax-related concerns. On the capital gains tax, the FPIs had said that currently, foreign investors prefer to route funds through countries with which India has double taxation avoidance agreement (DTAA) to avail of the benefits including exemption from payment of short-term capital gains tax.
The meeting, attended by about 40 market participants including LIC, UTI Mutual Fund, Birla Sun Life, JM Financial and Kotak Mahindra Mutual Fund, also took up the issue of restoring tax exemption with regard to securities transaction tax (STT), which was withdrawn in 2008. Discussions were also held on ways to ensure widening of investor base, bigger and wider retail participation in the bond market and development of market infrastructure.
BSE managing director Ashishkumar Chauhan said discussions were focussed on attracting investments, taxation regime, depositories and methods of reaching out to people. “Most of the discussions were on KYC and how you get one single framework for all the intermediation whether in mutual funds, whether in stock markets, to bring in a unified KYC,” Chauhan added.
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