Finance minister Arun Jaitley on Thursday unveiled several measures to encourage the financial services sector by suggesting the introduction of a uniform know your customer (KYC) norms that could be used across the entire sector.
“Investors can now open a single demat account to access all financial instruments, he said in his maiden budget speech.
The Budget also includes tax benefits for overseas investors and easier rules for corporate bonds as well as a new instrument called Bharat Depository Receipt.
The finance minister has eased norms for American Depository Receipts and Global Depository Receipts (ADRs and GDRs) and allowed companies to issue depository receipts on all permissible securities and allowed international settlement of Indian debt paper.
Following these changes that remove several restrictions, the regulators of various sectors within the financial services industry can take steps to create a vibrant market for corporate debt and currency derivatives.
He also extended the validity of the 5% withholding tax on all corporate bonds to June 30, 2017.
“We will expeditiously complete the ongoing process of consultations with all the stakeholders on the recommendations of the Financial Sector Legislative Reforms Commission,” Jaitley said, adding the commission’s suggestions are important.
Addressing the tax concerns of foreign portfolio investors, proposed to provide that income arising to this class of investors from securities transactions will be treated as capital gains.