MUMBAI, July 30 (Reuters) - Foreign investors will be
eligible to benefit from lower withholding taxes for debt only
if the rate of interest on the bond issued by a firm does not
exceed 500 basis points (bps) above the base rate of State Bank
of India, the Finance Ministry said in a notice on
The details come after the government in April cut tax rates
for foreign investors on interest income from government and
corporate debt accrued between June 1, 2013 and May 31, 2015.
If the coupon paid is above the specified cap, foreign
investor would need to pay the higher withholding tax that
applied before the government's measure.
For bonds issued before July 1, 2010, the SBI base rate on
July 1, 2010 will be used as the benchmark. For bonds issued on
or after July 1, 2010, the benchmark will be the SBI base rate
on the date when the bond was issued by the company.
(Reporting by Archana Narayanan; Editing by Anand Basu)