On 21 December 2016, the Central Board of Direct Taxes (CBDT) released a circular containing responses to questions raised by foreign portfolio investors (FPIs), private equity and venture capital investors and other stakeholders on the applicability of the Income Tax Act, 1961. Among other clarifications, the CBDT stated that funds registered as FPIs would be subject to indirect transfer tax when investors redeemed their interests in the fund (if Indian assets represent at least 50% of the value of assets owned by the FPI whose shares are being directly or indirectly transferred, and if the investor holds more than 5% of the interest in the fund).
The business law digest is compiled by Nishith Desai Associates (NDA). NDA is a research-based international law firm with offices in Mumbai, New Delhi, Bengaluru, Singapore, Silicon Valley and Munich. It specializes in strategic legal, regulatory and tax advice coupled with industry expertise in an integrated manner.
