FM Nirmala Sitharaman holds a
pre-budget meeting with stakeholders
Stakeholders from the
financial sector and the capital market on Tuesday met Finance Minister Nirmala
Sitharaman to discuss their demands ranging from taxation reforms to
restoration of trading of banned agricultural commodities.
On the second day of the
series of meetings before the Budget 2023-24, some equity market stakeholders
demanded that category-III of Alternative Investment Funds (AIFs) be given the
pass-through status in terms of taxation to protect them from potential double
taxation, said people privy to the meeting.
Category I and II AIFs
are investors in private markets as they buy shares and bonds of unlisted
companies. Category III usually comprises hedge funds who invest their money
only in listed securities.
Representatives from the
commodity market have demanded cost rationalisation and reduction of commodity
transaction tax to Rs 500 per crore from Rs 1000 per crore, said an official.
industry stakeholders asked to bring GIFT city reforms at par with Singapore
and Hong Kong.
Reps from the brokering
segment have requested to grant industry status for financial intermediaries
under the Securities and Exchange Board of India (Sebi) so as to attract more
investment and to enable large spending on technology at lower financial costs.
In the meeting, we
demanded restoration of rebate under Section 88E to provide relief from high
transaction costs. This will lead to higher volume, depth and liquidity in
capital markets, said another source.
Earlier, some of the
foreign funds had made representations to the ministry seeking a uniform tax
rate to ease the compliance burden. Currently it depends on the asset class and
the holding period.
Industry bodies have also
sought tweaking of buyback tax as companies pay flat 20 per cent plus surcharge
on buybacks. The demand is to make it taxable in the hands of investors. A
similar proposal was also mooted in a recent discussion paper by Sebi.