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The Confederation of Indian Industry has recommended removal of tax deduction at source (TDS) for corporate bonds as part of a report to strengthen the corporate bond market. The report on ‘Development of Corporate Bond Market in India' will be presented to SEBI Chairman, Mr U.K. Sinha at the CII's Annual General Meeting in the capital on Tuesday. CII has recommended fiscal as well as non-fiscal measures to simplify and add clarity to the corporate bond market.
The chamber has suggested that tax deduction at source, even on non-resident investors, should be removed completely. Further, the CII report said stamp duty on issuance, transfer and re-issuance (whether unlisted bonds, bonds held by any non-resident investors or if held in physical form) should be removed.
As part of the issue process, further simplification is required in process for debt listings, particularly for issuers who access the debt market regularly. More clarity is need on ‘shelf' and ‘tranche' prospectus and contents through incorporation of relevant provisions in the debt regulations in addition to the Companies Act, 1956, provisions.
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