Moneycontrol
Jan 12, 2017 12:14 PM IST | Source: Moneycontrol.com

RBI looks to make overseas borrowings cheaper for Indian cos

As interest rates rise in the US, money is expected to go out of India. In such times of uncertainty, a scheme of uniform rate of tax could boost investments in India.

Moneycontrol Bureau

The Reserve Bank of India has proposed that a uniform rate of withholding taxes be levied for all overseas borrowings, regardless of the currency in which the money has been borrowed, reports The Economic Times. This could lower the cost for Indian companies to raise money from outside the country.

As interest rates rise in the US, money is expected to go out of India. In such times of uncertainty, a scheme of uniform rate of tax could boost investments in India.

A withholding tax of around 5-20 percent is currently levied on interest paid in foreign currency to a non-resident on borrowings. While 10 percent in the standard rate, 5 percent is levied on certain sectors.
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