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Controversy over draft CBDT circular solved: FM

The Finance Minister said that whether an Indian was a trader or an investor would be decided by the assessing tax officer.

india Updated: May 22, 2006 18:00 IST

Finance Minister P Chidambaram has said that the controversy over the CBDT draft circular was over and that there should be no misapprehension about it.

"The matter has been put to rest now. Whether a person is an investor or a trader is a question of fact and will be decided by the court," he said replying to the Taxation (Amendment) Laws Bill in response to queries from members on the stock market crash.

"When the guidelines come, they will bring uniformity and greater clarity. Investors must be reassured that more transparency will be there", he said.

Elaborating on the draft circular, Chidambaram said that it had been there since 1989, and after 17 years CBDT had put a draft circular on the website to update the earlier version.

"This is a perfect and a democratic exercise," he said.

Asking the media to exercise restraint while reporting sensitive matters like this, Chidambaram said, "I am disappointed with the continued uninformed reporting by the media. This should be checked."

The Finance Minister said that whether an Indian was a trader or an investor would be decided by the assessing tax officer.

Chidambaram has repeatedly made it clear that FIIs (Foreign Institutional Investors) do not come under the purview of the circular.

First Published: May 22, 2006 17:46 IST