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Banks seek clarity on tax on bonds

Press Trust Of India 

Bankers have sought clarity from the ministry regarding taxation of additional Tier-I bonds through which they are expected to raise capital to meet Basel-III norms. Clarity on taxation would help investors in putting money into such instrument without hesitation.

have requested the ministry to clarify tax treatment issues with regard to additional Tier-I bonds in a meeting held recently.

Sources said bankers in the meeting said investors wanted to know if these instruments will be treated as bonds or equity for taxation purposes.

Under the Basel-III norms, additional Tier-I bonds come with loss absorbency features meaning in case of stress, can write off such investments or convert them into common equity if approved by the RBI.

First Published: Tue, October 07 2014. 00:32 IST