NEW DELHI: FM Nirmala Sitharaman on Tuesday moved the Taxational and Other Laws (Amendment) Bill, proposing fresh steps to woo overseas investors and fund managers into the country, while offering predictability to electronics goods makers and component suppliers.The bill will also seek Parliamentary approval for the tax changes introduced through an amendment to attract foreign investors in govt securities.Seeking to simplify rules to attract fund managers to India, govt has sought to cut down the list of conditions that discouraged them from being based in the country as they feared that the entire foreign fund may be taxable here. Now, the idea is to retain only those provisions that are essential to prevent misuse and round tripping of money by Indian residents, officials said.“A fund manager can now relocate to India without the foreign fund being treated as doing business in India. The expectation is that many managers of global funds will move to India, bringing high value activity and jobs with them. This proposal will also apply to International Financial Services Centre (Gift City) to provide flexibility of location to the fund managers,” an official said.Besides, the Centre has sought to provide simpler rules for data centres, which were offered tax concessions – but with layers of approvals and govt notifications. The bill removes the approval requirements and allows Indian data centres to be run on a leased basis – instead of being under direct ownership.In case of electronics, govt has made the income of a foreign company tax free when it supplies machinery and tooling to an Indian electronics manufacturer for a period of 15 years, instead of five years at present. Electronics goods have been clearly defined and include mobile phones, laptops and computers, tablets, servers and their key parts and accessories.Besides, electronics component suppliers, which store components in bonded warehouses for local manufacturers, have been given incentives to ensure just in time delivery of inputs that are critical.To boost diamond trade, govt has also proposed to fully exempt the income of overseas diamond miners and traders connected to them from selling precious stones in special economic zones for 15 years. The definition of diamond has also been widened.
