Read FM's lips: No tax on FIIs

Cockler

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posted on 18 years ago — updated on 1 second ago

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The Finance minister said that the govt has no intention of taxing FIIs as the Sensex had fallen due to global pressures.

New Delhi: Finance Minister P Chidambaram on Saturday said the Government had no plan to tax Foreign Institutional Investors (FIIs).

Chidambaram said a Central Board of Direct Taxes (CBDT) circular, which is blamed for the market crash on Friday, did not mean to bring FIIs in the tax bracket.

The circular led investors to believe that the Government will start taxing FIIs. Chidambaram said FIIs don't have permanent establishments in India and therefore cannot be taxed. No FII has been assessed as a trader till date.

"Don't worry, we won't tax you at 40 percent" he said, adding that the markets fell because of global pressures.

"The decline in stock market over the last few days can be attributed to many reasons. The decline in worldwide metal prices, hardening of interest rates, the attractiveness of other competitive markets," said Chidambaram.

Chidambaram said that with inflation under control and a nine per cent manufacturing growth rate, economic growth will not be affected by what happens in markets.