SEBI has issued rules for FPIs to transfer securities off-market to the IFSC.

SEBI, the market regulator, issued instructions for the transfer of foreign funds to the International Financial Services Centre (IFSC). A Foreign Portfolio Investor (FPI) or its wholly-owned special purpose vehicle may seek clearance from its Designated Depository Participants (DDP) for a “one-time ‘off-market transfer of its securities to the ‘resultant fund,’” according to Sebi.

To periodically build the IFSC in GIFT City, Gujarat, a worldwide financial center, tax incentives are granted to shift foreign funds to IFSC under the Finance Act, 2021. According to Sebi, DDPs may provide authorization for a one-time off-market transfer of securities for such relocation after conducting proper due diligence.

The FPI shall be assumed to have filed for the surrender of its registration if it submits a relocation request. “The ‘off-market transfer shall be permitted without regard to any tax legislation or FEMA provisions,” Sebi stated. At the Gujarat International Finance Tec-City (GIFT) in Gandhinagar, the country’s first IFSC has been established.

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IMPORTANT INCOME TAX RULES THAT PUT INTO EFFECT

In the presentation of the Union Budget 2021, Union Finance Minister Nirmala Sitharaman proposed some modifications to the income tax regulations. The modifications are scheduled to take effect on April 1, 2021. From April 1, senior citizens aged 75 and over who receive income from a pension and interest from a fixed deposit will be free from submitting ITR. The Finance Minister recommended a higher TDS (tax deducted at source) for individuals who do not file an ITR and stated that individuals who contribute more than 2.5 lakh to an EPF account will be taxed.

1) PF tax rules: From April 1, 2021, interest on yearly employee contributions to provident funds over 2.5 lakh will be taxed. The measure is intended at taxing high-value depositors in the Employee Provident Fund, according to the government (EPF). The EPF is for the benefit of workers, and the measure will not impact anyone earning less than Rs. 2 lakh per month.

2) TDS: In budget 2021, the finance minister recommended increased TDS (tax deducted at source) or TCS (tax collected at source) rates to encourage more individuals to complete income tax returns (ITR). The budget proposes adding new Sections 206AB and 206CCA to the Income Tax Act as a unique provision for the deduction of higher TDS and TCS rates for non-filers of an income tax return.

3) Senior citizens above the age of 75 are excluded from submitting an ITR: Individuals above the age of 75 are excluded from filing income tax returns, according to the Finance Minister’s budget for 2021. The exemption will be accessible to older individuals who have no other source of income and rely only on their pension and interest from the bank where their pension account is held.

4) Pre-filled ITR forms: Individual taxpayers will get Income Tax Returns that have been pre-filled (ITR) The move is intended to make filing taxes easier. In income tax returns, details such as salary income, tax payments, TDS, and so on are already pre-filled.

5) LTC: The central government proposes in Budget 2021 to exclude cash allowance from taxation in place of the Leave Travel Concession (LTC). Last year, the government launched a program for those unable to receive their LTC tax benefit due to covid-related travel limits.

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