The preferential tax treatment given to domestic banks may force foreign banks into a rethink on setting up offshore banking units (OBUs) in India.
As per the Finance Bill, 2003, these banks have been denied the benefit of deduction in respect of their banking income derived from OBUs even as the same has been extended to scheduled commercial banks incorporated in India.
That foreign banks have been denied the advantage of deduction in respect of certain incomes derived from OBUs is underscored by the fact that an amendment to the Finance Bill, 2003, explicitly allows