Tax breather for foreign investors: All you need to know

CBDT circular had raised multiple taxation concerns

Foreign portfolio investors (FPI) can now breathe easy with the Income Tax (I-T) Department on Tuesday putting in abeyance its controversial circular on taxing India-dedicated funds.

Experts said clarity was necessary on the issue at the earliest so that FPIs were certain. They expect the finance ministry to amend the law in the Budget to put an end to the controversy.

The circular, in the form of frequently asked questions (FAQs), had spooked the markets when it was issued last month. 

It also gave rise to fears of retrospective taxation as the principal amendment to the Income Tax Act