RBI sets up working group on tax practices for fin instruments

To promote financial savings, the RBI has set up an eight-member working group to study issues related to taxation of financial instruments.
"With a view to promoting private financial savings, the Reserve Bank of India has constituted a Working Group to study various issues relating to taxation of financial instruments in India and suggest rationalisation," it said in a release.
The terms of reference of the working group include, reviewing current tax structure as applicable to various financial instruments issued in the Indian financial system and identifying possible 'tax arbitrage' among financial instruments under the extant tax structure.
Also, the group would suggest rationalisation of tax treatment across financial instruments to promote financial savings and for minimising distortions, taking into account the recommendations of earlier Committees in this regard and the draft Direct Taxes Code.

Balbir Kaur, Adviser, Department of Economic and Policy Research, RBI will be the convener of the working group.
The group may consult with experts and market participants as considered necessary, RBI said.
"The Working Group is expected to submit its report within three months of its first meeting," it added.