look news india
Mumbai: The Indian Income Tax Authority has now asked foreign portfolio investors (FPIs) to clarify the path of their investments in the stock markets. Some FPIs have been asked whether they have given loans to FPIs for trading in stock markets.
It is not clear for what purpose the Income Tax Department has sought this information, but it is being said that offshore funds have been asked to provide details of the source of their funds i.e. the agreements entered into between the lenders and their parties. Some tax and finance professionals say the Income Tax Department's move could be to find out if foreign portfolio managers have any indirect links with Indian companies and promoters.
According to experts, if the loan is used for business in India, the interest paid by the non-resident lender to the non-resident borrower is taxable, but not in the case of FPIs. Surely the Income Tax authorities will also be investigating another aspect, whether there is direct or indirect round-tripping of Indian funds from the loan route to FPIs?
Meanwhile, while ordering the FPIs to provide details of investors-stakeholders in the fund, department officials have also inquired about the source of funds of those who are providing capital or loans to the entity and whether the capital is being invested by Any loan has been taken. Stakeholders. It is said.