Concessional 5% withholding tax continues for FPI debt interest income

The clarification came after a few reports said that tbe concessional withholding tax rate of 5 per cent on interest income of FPIs has been withdrawn. Here is all you need to know:

The Income Tax Department on Wednesday clarified that foreign portfolio investors (FPIs) will continue to enjoy five per cent withholding tax on debt interest income. The clarification came after a few reports said that the concessional withholding tax rate of 5 per cent on interest income of FPIs has been withdrawn. The Central Board of Direct Taxes (CBDT) confirmed recently that the five per cent tax rate on interest income of FPIs will see no change. "It is hereby clarified that there is no change in the said provision even after amendment of section 115AD vide Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the concessional rate of tax of 5% shall continue to be applicable for interest income referred to in section 194LD of the Act," the CBDT said in a statement.