FPIs: FPIs can have their cake, and then pay

Currently, if an entity miscalculates dividend tax and pays less advance tax, it will subsequently have to bear the interest on the tax that was underpaid.

Synopsis

In the current system, the TDS being charged for FPIs was higher than the actual tax liability of FPIs. Further, offshore funds had to wait until the end of the financial year to claim a refund from the Indian tax department.

The budget has eased taxes on dividends for overseas investors and upcoming instruments like Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).The proposal to allow foreign portfolio investors (FPIs) to avail treaty rates for tax deducted at source (TDS) for dividends is expected to cut the TDS rates for offshore funds by as much as 50 per cent. Until now, FPIs were subject to TDS of up to 22 per cent for

BY

ET Bureau

3 mins read, Last Updated: Feb 2, 2021, 07:11 AM ISTGIFT ARTICLEFONT SIZE

AbcSmall

AbcMedium

AbcLarge

SAVECOMMENT

Sign in to read the full article

You’ve got this Prime Story as a Free Gift

Yearly

(Save 49%)

₹2499

15
Days Trial
+Includes DocuBay and TimesPrime Membership worth ₹1499 & ₹999 resp.

2-Year

(Save 63%)

₹3599

15
Days Trial
+Includes DocuBay and TimesPrime Membership worth ₹1499 & ₹999 resp.

Subscribe Now

Already a Member? Sign In now

Why ?

Sharp Insight-rich, Indepth stories across 20+ sectors

Access the exclusive Economic Times stories, Editorial and Expert opinion

Clean experience with
Minimal Ads

Comment & Engage with ET Prime community

Exclusive invites to Virtual Events with Industry Leaders

A trusted team of Journalists & Analysts who can best filter signal from noise