Govt. lists Bill to replace FII tax exemption Ordinance
Bill proposed to continue the tax exemption for foreign institutional investors and the Bank for International Settlements on certain government security investments after a June Ordinance.
- The Union government listed a Bill for the Monsoon Session to replace a June Ordinance on tax exemption for specified investors in government securities.
- The June Ordinance exempted foreign institutional investors and the Bank for International Settlements from capital gains tax and tax on interest from investments in government securities.
The Union government has listed a Bill for the Monsoon Session to replace a June Ordinance that exempted foreign institutional investors and the Bank for International Settlements from capital gains tax and tax on interest from investments in government securities. The proposed Bill seeks to continue the same tax treatment through legislation.
The issue matters for UPSC because it connects the ordinance-making route, legislative replacement, and taxation policy for sovereign debt instruments held by non-resident institutions.
Background and earlier position
UPSC can link this item to the ordinance-making power under Article 123 of the Constitution, the legislative route for replacing ordinances, and the taxation treatment of government securities held by foreign investors. A mains question can test the policy rationale for such exemptions, while a prelims question can test the institution and instrument involved.
