No tax on converting foreign banks into WoShttps://indianexpress.com/article/news-archive/web/no-tax-on-converting-foreign-banks-into-wos/

No tax on converting foreign banks into WoS

Foreign banks with complex structures and which do not provide adequate disclosures would have to operate in India only through WoS.

The Reserve Bank of India has said conversion of existing foreign bank branches into wholly-owned subsidiaries (WoS) in India will neither attract any capital gains tax nor stamp duty.

The RBI said it was receiving queries from foreign banks regarding capital gains tax and incidence of stamp duty on conversion of existing foreign bank branches into wholly owned subsidiaries. “As regards applicability of stamp duty…exempting from stamp duty any conversion of a branch of a foreign bank into wholly owned subsidiary or transfer of shareholding of a bank to a holding company,” RBI said.

Earlier this month,RBI had said that foreign banks with complex structures and which do not provide adequate disclosures would have to operate in India only through WoS in order to regulate and avoid 2008-like crisis. It also allowed foreign banks to list their subsidiaries in the local stock exchanges.