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Higher taxes for foreign investors from April 1

IANS  |  Mumbai 

Changes in the SEBI listing and prevention of insider-trading regulations, revisions in the double-taxation avoidance agreements (DTAAs) with and are set to come into effect from April 1.

The changes in DTAAs give the right to tax capital gains arising on Indian equity shares sold by a or Mauritian resident

All this may also help improve corporate governance standards for the listed companies in

Indian financial markets recently saw several cases of high volatility in companies, like Sun Pharma, and IL&FS, which created panic among In all these, the role of the board came under lens.

The modifications in the listing agreement will improve corporate governance by making relevant changes in the organisation of the board.

Among the key regulations, which will come into effect, are that the top 1,000 listed companies will be required to have at least six directors on their board against three, prescribed by the Companies Act 2013. Besides, the top 500 will also need to have at least one independent woman

Also, a can hold that position in not more than the eight listed entities, while an individual will not be permitted to be independent in more than seven companies.

A detailed explanation will be required if an resigns before completion of the term.

The (SEBI) has also amended insider-trading regulations. As per the amendment, the definition of unpublished price sensitive information (UPSI) has been narrowed, allowing listed companies to share such information for board-determined legitimate purposes, but only if the disclosure is in the best interest of the company.

While UPSI will help check insider-trading, the SEBI regulations have permitted flexibility by allowing block trade between insiders or between related parties within a company sharing same UPSI.

The changes will also keep transactions undertaken due to a regulatory obligation and exercise of stock option at a pre-determined price out of the ambit of insider-trading.

The new requirements with relation to SEBI regulations will also apply to intermediaries like auditors, accountancy firms, law firms, analysts and consultants. They'll have to put in place internal controls to check insider-trading.

Additionally, the concessional tax regime for investors under the earlier DTAAs for making investments into India via and will cease to exist from April 1.

India amended DTAAs with Singapore and in 2016. It gave India the right to collect tax on capital gains arising on Indian equity shares sold by a Singapore or Mauritian resident.



(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, March 23 2019. 16:18 IST