With a view to promoting private financial savings, the Reserve Bank of India has constituted a Working Group to study various issues relating to taxation of financial instruments in India and suggest rationalisation.

The terms of reference of the Working Group are:

1. To review the current tax structure as applicable to various financial instruments issued in the Indian financial system;

2. to identify possible ‘tax arbitrage’ among financial instruments under the extant tax structure; and

3. to suggest rationalisation of tax treatment across financial instruments to promote financial savings and for minimising distortions, taking into account the recommendations of earlier Committees in this regard and the draft Direct Taxes Code.

The Working Group will comprise:

The Working Group may consult with experts and market participants as considered necessary.

The Working Group is expected to submit its report within three months of its first meeting.

Ajit Prasad
Assistant General Manager

Press Release : 2014-2015/366