Home ECONOMY CBDT to settle foreign funds’ claims within a month

CBDT to settle foreign funds’ claims within a month

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New Delhi, April 27:

The Income Tax department has directed its officers that cases of foreign institutional investors (FIIs) seeking tax exmption under the Double Taxation Avoidance Agreements (DTAAs) with other countries must be decided within a month of claim filing.

tax--621x414“It has been decided that in all cases of foreign institutional investors seeking treaty benefits under the provisions of respective DTAAs, decision may be taken on such claims within one month from the date such claim is filed,” the finance ministry said in a release on Monday.

“The officers concerned have been directed accordingly,” it added.

The Central Board of Direct Taxes on Friday wrote accordingly to all principal chief commissioners of the income tax department.

“Since the issue involved is limited, such claims should be decided expeditiously. Accordingly, it has been decided that all cases of foreign institutional investors seeking treaty benefits under the provisions of tax treaties may be taken on such claims within a month,” said the CBDT.

Reacting to the development, Sunil Shah, a partner with consultants Deloitte Haskins and Sells, said the recent debate on tax demands on some foreign funds under minimum alternate tax, as also the reopening of cases pertaining to the past, needed government clarification.

“Otherwise, it will need to be resolved by the courts,” he said, adding there were several foreign portfolio investors who qualified for benefits under the DTAA treaties that India has entered into with other countries.

“This is a welcome step that will clear the uncertainty for some categories of foreign funds. For those who do not have treaty protection, the controversy would continue till it is settled either by the government or by the courts,” Shah said referring to the tax board circular.

Minister of State for Finance Jayant Sinha has assured foreign funds, during a meeting with them last Thursday, that the government was already considering some amendments to clarify its position on minimum alternate tax rules with retrospective effect for their benefit. (IANS)