New Delhi: Financial sector players on Thursday advocated simplifying capital gains tax and reducing securities transaction tax in the upcoming FY25 budget to boost capital markets.
In a pre-budget meeting with Finance Minister Nirmala Sitharaman, some of the participants urged the government to fix tax arbitrage wherever it exists.
This was the second pre-budget consultation, attended by leading experts from the financial sector and capital markets, in relation to the upcoming General Budget 2024-25, the Ministry of Finance said in a post on X.
The full budget for 2024-25 is expected to be tabled in Parliament next month.
Emerging from a two-hour meeting with the finance minister, Arun Kohli, managing director and country head of Morgan Stanley India Company, said fiscal policies must be stable and long-term oriented.
Participants also expanded on their suggestions on capital gains tax and securities transaction tax.
According to George Alexander Muthoot, CEO of Muthoot Group, some of the participants advocated deepening the market and offering some tax incentives.
"We have suggested that since NBFC credit has grown and the RBI has flagged its over-reliance on banks, the allocation of funds from SIDBI and NABARD could increase for refinancing of NBFCs," the FIDC chief said. Raman Aggarwal.
NBFCs (non-banking financial companies) also sought clarity on the demand for GST on co-lending and payment of GST on service fees, Agarwal added.
Asset management companies also discussed issues related to GIFT CITY and ways to retain capital within the country, he noted.
Agarwal also requested an extension of 5 percent withholding tax on all ECB loans and bonds.
As per Article 194LC, withholding tax was applicable at 5 per cent on offshore borrowing through ECB loans/bonds till June 30, 2023. The same was not extended in the recent amendment bill.
The IVCA delegation led by Ashley Menezes, Partner and COO of ChrysCapital, urged the government to implement the 2022 budget announcement of blended financing through a Fund of Funds approach, managed by competent administrators to lead the capital to strategies aligned with government priorities.
Furthermore, IVCA has suggested that Alternative Investment Funds (AIFs) should get tax parity and clarity like Foreign Portfolio Investors (FPIs), so that tax litigation is minimized and results in ease of doing business.
The Indian Private Equity and Venture Capital Association (IVCA) also made suggestions to make India an asset management hub like 'Make in India' and 'Manage from India' for global capital.
"We requested the Finance Minister to launch a Jan Nivesh campaign to create financial inclusion for millions of Indians, who are trapped in Ponzi schemes and speculations," Kotak Mahindra AMC CEO Nilesh Shah said.
Many more Indians need to be reached now to ensure their financial freedom.
In a pre-budget meeting with Finance Minister Nirmala Sitharaman, some of the participants urged the government to fix tax arbitrage wherever it exists.
This was the second pre-budget consultation, attended by leading experts from the financial sector and capital markets, in relation to the upcoming General Budget 2024-25, the Ministry of Finance said in a post on X.
The full budget for 2024-25 is expected to be tabled in Parliament next month.
Emerging from a two-hour meeting with the finance minister, Arun Kohli, managing director and country head of Morgan Stanley India Company, said fiscal policies must be stable and long-term oriented.
Participants also expanded on their suggestions on capital gains tax and securities transaction tax.
According to George Alexander Muthoot, CEO of Muthoot Group, some of the participants advocated deepening the market and offering some tax incentives.
"We have suggested that since NBFC credit has grown and the RBI has flagged its over-reliance on banks, the allocation of funds from SIDBI and NABARD could increase for refinancing of NBFCs," the FIDC chief said. Raman Aggarwal.
NBFCs (non-banking financial companies) also sought clarity on the demand for GST on co-lending and payment of GST on service fees, Agarwal added.
Asset management companies also discussed issues related to GIFT CITY and ways to retain capital within the country, he noted.
Agarwal also requested an extension of 5 percent withholding tax on all ECB loans and bonds.
As per Article 194LC, withholding tax was applicable at 5 per cent on offshore borrowing through ECB loans/bonds till June 30, 2023. The same was not extended in the recent amendment bill.
The IVCA delegation led by Ashley Menezes, Partner and COO of ChrysCapital, urged the government to implement the 2022 budget announcement of blended financing through a Fund of Funds approach, managed by competent administrators to lead the capital to strategies aligned with government priorities.
Furthermore, IVCA has suggested that Alternative Investment Funds (AIFs) should get tax parity and clarity like Foreign Portfolio Investors (FPIs), so that tax litigation is minimized and results in ease of doing business.
The Indian Private Equity and Venture Capital Association (IVCA) also made suggestions to make India an asset management hub like 'Make in India' and 'Manage from India' for global capital.
"We requested the Finance Minister to launch a Jan Nivesh campaign to create financial inclusion for millions of Indians, who are trapped in Ponzi schemes and speculations," Kotak Mahindra AMC CEO Nilesh Shah said.
Many more Indians need to be reached now to ensure their financial freedom.
