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Ficci outlines fiscal agenda to boost inbound and outbound investments

Industry body Ficci has suggested a nine-point formula to encourage inbound and outbound investments.

By: PTI | New Delhi |
November 27, 2006 4:06:26 am

Industry body Ficci has suggested a nine-point formula to encourage inbound and outbound investments. The chamber said the receipt of dividend and capital gains should be exempted from tax in order to encourage subsidiaries of Indian companies overseas to repatriate their earnings into India. “Dividend Distribution Tax (DDT) should be brought into the ambit of DTAA to enable the overseas holding companies, having their subsidiaries in India, to offset the distribution taxes paid in India, from tax payable by them in their respective countries and a re-look at the transfer pricing norms, which provide for a 100 per cent to 300 per cent penalty on the tax payable on the amount of adjustment,” Ficci said in a release. The chamber said since Indian companies are investing in other international companies, this transaction is generally not taxable in those countries, but in the absence of aspecific provision, exchange of shares arising from such transcation may be regarded as transfer liable to tax under the Indian Tax laws. It demands that such a transaction in respect of such Indian assets should not be regarded as transfer for the purposes of Capital Gains of the Income Tax Act.

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First published on: 27-11-2006 at 04:06:26 am

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