No extension to lower withholding tax triggers concern among FPIs: Report

Foreign portfolio investors (FPIs) are concerned that they may face a higher withholding tax after the current concessional tax rate regime ends by the end of June, The Economic Times reported Friday. 
 

Finance Minister Nirmala Sitharaman did not announce any extension to concessional tax rate, which is effective till June 30, in the Budget. 
 

Currently, FPIs investing in government securities and corporate bonds avail concessional 5 per cent withholding tax rate. Without extension, the withholding tax rate would shoot up to 20 per cent, the report said.
 

The withholding tax rate applies on the interest earned by the FPIs on