Regulated by SEBI, the FPI regime is a route for foreign investment in India. The FPI regime came as a harmonised route of foreign investment in India, merging the two existing modes of investment, that is, Foreign Institutional Investor (‘FII’) and Qualified Foreign Investor (‘QFI’).
Nature of Income |
Tax Rate* |
|||
---|---|---|---|---|
Capital Gains |
Listed Equity/ Units of equity oriented MF |
Unlisted Equity (not subject to STT) |
Debt securities/ |
Future & Options |
Long Term |
10% |
10% |
10% |
Not applicable |
Short Term |
15% |
30% |
30% |
30% |
Dividend income |
Exempt |
Not applicable |
||
Interest income |
Government bonds - 5%*** Rupee denominated corporate bonds - 5%*** Other securities - 20% Other interest income - 40% |
The said restriction could be overcome if investing under Voluntary Retention Route (VRR)
|
Rupee denominated corporate bonds - 5%*** Other securities - 20% Other interest income - 40% |
The said restriction could be overcome if investing under Voluntary Retention Route (VRR)
* In addition, a surcharge and health and education cess is leviable
** STT – Securities Transaction Tax
*** On interest payments between June 1, 2013 and June 30, 2020 and subject to fulfillment of conditions.
Capital Gains |
Interest |
|
---|---|---|
Equity Shares |
Derivatives/ Debt |
WHT rate |
Exempt in case of shares acquired pre 01 April 2017 |
Exempt |
7.5% |
Should you decide to set-up an FPI in India, for investments into India, PwC could help with the following