India Tax Agency Announces Proposal to Modify Income Tax Rules on Nonresident Investments in Shares

The Indian Central Board of Direct Taxes May 19 announced a proposal to modify income tax rules, for calculating the value of shares issued to nonresidents. The proposal includes measures to: 1) include five new valuation methods for nonresident investments, in addition to the Discounted Cash Flow (DCF), and Net Asset Value (NAV) methods; 2) clarify the determination of fair market value (FMV) for resident and nonresident investments, including acceptance of a Merchant Bankers’ valuation report completed not more than 90 days before the issue date of the shares; 4) allow a safe harbor of 10 percent for variations in ...