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



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