May 12, 2016

End son-in-law treatment for FIIs; India no Africa: Jhunjhunwala

Terming the amendment to the India-Mauritius Double Tax Avoidance Agreement (DTAA) as a "sensible move by a sensible government", ace investor Rakesh Jhunjhunwala said income on investments made by foreign investors should be subject to tax.

"The move is well thought out. It will put all litigation to rest. It is coming into effect in March 2017 anyway," he told CNBC-TV18 in an exclusive interview. Jhunjhunwala's comments came in the wake of the government's decision to amend the Mauritius treaty, which will allow it to levy capital gains tax on FII income.

He also allayed fears that the law would hamper inflows coming in through the participatory notes route, saying that as long as FIIs were able to get decent returns from India, they would not mind paying tax. "I have not seen a bull market in which people don't participate because there is a 20% rate of tax. If people see signs of income, money will come," he said. 

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