"Indian tax authority would not go beyond financial investor (FIIs) to check the details about the P-Note holders. Accordingly, a question of liability for tax in India of the P-Note holder would not arise. Necessary clarification will be issued", he told reporters here.
Following an assurance by the Minister, the BSE Sensex shot up 285.66 to 17,344.27 points at mid session. Participatory Notes (P-Notes) are instruments that allow foreign institutional investors (FIIs), which are not registered with market regulator SEBI, to invest in the Indian equity market.
Referring to the provisions in the Finance Bill 2012 on overseas investments, Mukherjee said, "I would like to categorically clarify that the intention of the government is is not to cause any harassment to genuine investors." Pointing out that P-Note holders invest in stock market through FIIs, the Minister said, "the income tax department would examine the tax liability of the FIIs."