India: Concessional withholding tax rate for foreign portfolio investors not extended
The concessional rate is only effective until 30 June 2023.
Foreign portfolio investors
The Finance Bill 2023 did not include an extension of section 194LD of the Income-Tax Act, 1961, under which foreign portfolio investors benefit from a concessional 5% withholding tax rate on interest income earned from rupee-denominated bonds of an Indian company, a government security or investment made in municipal debt securities.
The concessional rate is only effective until 30 June 2023. Thereafter, foreign funds may be subject to a higher withholding tax rate of 20%.
Read an April 2023 report prepared by the KPMG member firm in Luxembourg
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.