Presenting the Budget in Parliament, Finance Minister Arun Jaitley proposed that category I and II foreign portfolio investors (FPIs) should be exempted from taxation on indirect transfers. In order to remove this difficulty, Jaitley has proposed to exempt FPI category I and II from the indirect transfer provision. However, hedge funds, individuals and other high-risk foreign investors will not get this relief. Pranay Bhatia, Partner, Direct Tax at BDO India, said the proposed amendment to the law would set at rest apprehensions of foreign investors. Last month, the tax department had kept in abeyance its recent circular on indirect transfer of shares by foreign investors, who were wary of multiple taxation.

Source: dna February 01, 2017 08:59 UTC