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Easy tax norms make CCDs a hit among Mauritian, Singaporean investors

Gains are exempt from taxation provided investors exit before the conversion to equity

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Ashley Coutinho Mumbai
Investors from Mauritius and Singapore are turning to compulsory convertible debentures (CCDs) for making fresh investments in India. 

India's tax treaties with Mauritius and Singapore have been amended to give India the right to tax the sale of equity shares for investments after April 1, 2017. The agreements offer exemption in case of sale of other securities such as debentures if an investor exits the instrument before its conversion to equity. 

Conversion of CCDs into equity is tax neutral, which enables these securities to be at par with equity investments, while allowing the investor or borrower to enjoy the benefits

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First Published: May 29 2019 | 11:49 AM IST

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