(REOPEN DCM 38)

In response to various queries raised by stakeholders seeking clarification on the scope of indirect transfer provisions, the CBDT had issued circular in December. However, concerns have been raised by stakeholders that the provisions result in multiple taxation.

However, last month, CBDT had kept in abeyance its recent circular on indirect transfer of shares by foreign investors.

To address these concerns, the government has proposed to amend the Income Tax Act to exempt category I and II foreign FPIs from taxation on indirect transfers.

The amendments in the Income Tax Act will take effect retrospectively from April 1, 2012 and will, accordingly, apply in relation to assessment year 2012-13 and subsequent years.

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)