Global Investors Raise Concerns Over Use of Judicial Anti-Avoidance Rule by Indian Tax Officials
· Business · Economic Times
International investors have urged Indian tax authorities to intervene regarding the use of the judicial anti-avoidance rule by income tax officials to deny tax reliefs. Representatives from the Asia Securities Industry & Financial Markets Association met with Central Board of Direct Taxes officials in Mumbai to discuss the issue. The rule has been invoked to reject tax benefits claimed by at least three Mauritius investors on the sale of grandfathered shares acquired before April 1, 2017. Industry practitioners argue that applying this rule contradicts the government's intent, particularly since the CBDT previously stated that general anti-avoidance rules would not impact such share sales. The CBDT is reportedly considering whether regulatory changes require a formal legal amendment.
Why it matters
The dispute creates policy uncertainty for foreign direct investors, private equity houses, and venture capital funds operating in India, potentially affecting inbound capital flows.
Read the original report — Economic Times
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