UnFair Tax Treatment Hurts Foreign Investor Sentiments!!
UnFair Tax Treatment Hurts Foreign Investor Sentiments!!

Non-residents entities who have invested in Indian projects through local resident entities find themselves in a relentless debate with the Indian tax authorities. The issue at the heart of this debate is whether Fair Market Value (‘FMV’) norms apply to investments made at premium by a non-resident through a resident entity in India. These are essentially the cases where a large number of overseas investors pool in their resources to optimise risk exposure and invest into a corporate entity in India that acts as a channel for downstream investments into project specific SPVs, typically in infrastructure projects. As per section 56(2)(viib) of the Indian Income Tax Act, 1961, when such investment is received at the level of Indian corporate entity, there is no problem as the investment is received directly from non-residents.


Download Pdf


We have taken all steps to ensure that the information on the website has been obtained from reliable sources and is accurate. However, this website is not intended to give legal, tax, accounting or other professional guidance. We recommend appropriate advice be taken prior to initiating action on specific issues.

ASA & Associates LLP

Looking for ASA Japanese website ?