No Tax Tangle, FPIs Keen to Move G-Sec Money Next Day
Foreign investors are advocating for expedited remittance processes after the Indian government introduced tax exemptions on bonds. They are calling on regulators and banks to enhance the speed of money transfers. This initiative aims to streamline remittance operations and mitigate settlement delays, as the exemption abolishes withholding taxes on interest and capital gains from these…
Foreign portfolio investors (FPIs) eyeing Indian government bonds are seeking a streamlined process to transfer funds the day following the sale of these securities. Currently, secondary market transactions in government securities (G-Secs) are settled on the subsequent business day, but remittances are typically allowed a day post-settlement.
This is due to custodian banks, tasked with managing FPIs' securities and funds, requiring tax withholding letters from accounting firms before funds can leave the country. However, a new development has emerged to simplify this procedure.
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