Markets Surge on Tax Liability Clarification
Stock markets surged to 17, 404.02 on Friday for the week ending March 30, 2012 after Finance Minister, Mr. Pranab Mukherjee said that the hard-hitting new “anti-avoidance” tax measures would not be used against Participatory Note Holders, reports said.
Participatory notes is a derivative instrument that allows overseas investors to buy shares without going through the mandatory “know your customer” norms in the Indian market. This has been a key source of investment inflows into the Indian stock market, reports said. This means that the Minister has assured the foreign investors that the proposed General Anti Avoidance Rules (GAAR) would not be invoked against P-note holders investing in the Indian stock markets through foreign financial institutions, reports said.
References: Hindustan Times, Times of India, The Hindu, Economic Times, Business Standard, Business line, India Today