New Delhi, Jan 18 (KNN) Easing the tax burdens of foreign investors for now, the Ministry of Finance has kept in abeyance for the time being the circular on fresh tax burden on indirect transfers mooted by the Central Board of Direct Taxes last month.

The tax department circular issued on December 21 clarified that all foreign portfolio investors (FPIs) with more than 50% of their assets in India and owning over 5% stake in any listed entities would incur tax under India’s indirect transfer provisions.

This tax would be levied in addition to the securities transaction tax and short-term capital gains tax and would hurt India-dedicated global investment vehicles more than, say an emerging markets fund that has less than 50% exposure to the Indian market.

“After the issue of the aforementioned circular, representations have been received from various FPIs, FIIs, venture capital funds and other stakeholders,” the finance ministry said in a statement late Tuesday, seeking to calm investor anxiety ahead of the Union Budget.

“The stakeholders have presented their concerns stating that the circular does not address the issue of possible multiple taxation of the same income. The representations made by the stakeholders are currently under consideration and examination. Pending a decision in the matter, the operation of the above mentioned circular is kept in abeyance for the time being,” the ministry said.