Withholding tax cut to 5% from 20% for all FX loans

by CNBC-TV18 | 7th-May-12 19:33

The FM today cut the withholding tax from 20% to 5%. Hitherto, this lower rate was only for infrastructure loans. This innocuous looking amendment may change the way Indian corporate borrow. This will boost for FX loans as cut in withholding tax means External Commercial Borrowings will becoming cheaper by 50-100 bps. This will be applicable for all FX loans.