NEW DELHI (TIP): Foreign institutional investors (FIIs) and qualified foreign investors (QFIs) have cause for cheer. The Finance Minister, P Chidambaram, slashed tax deduction at source on interest payments to 5 per cent against 20 per cent earlier (for FIIs) on investments made by them in Government securities and rupee-denominated corporate bonds.
This move is part of a larger effort by the Government to attract foreign capital to help finance a widening current account deficit. Currently, the ceiling for FII investment in G-secs is pegged at $25 billion. In the case of corporate bonds, it is $51 billion.