India's Tax Regulator Issues Press Release, Keeps In Abeyance Clarifications On Indirect Transfer

• CBDT had recently, in December 2016, released a circular containing clarifications on questions raised by stakeholders on various issues relating to indirect transfer provisions, particularly in the context of offshore funds and FPIs.
• Within less than a month of issuance of the clarifications, CBDT has issued a press release stating that pending further decision, the circular is being kept in abeyance.
• Decision taken to consider stakeholders' concerns of multiple taxation of the same income.

Recently, on December 21, 2016, the Central Board of Direct Taxes ("CBDT") released a circular¹ ("Circular") containing responses to questions raised by various stakeholders (including foreign portfolio investors ("FPIs"), foreign institutional investors ("FIIs") and venture capital funds ("VCFs") etc.) in the context of the applicability of the indirect transfer provisions under the Indian Income Tax Act, 1961 ("ITA"). Pursuant to the issuance of the Circular, the