Corporate Updates – 10-04-2015


RBI has reviewed the Sector Specific conditions of FDI policy relating to the Insurance sector to further liberalized the guidelines. Accordingly, with immediate effect, FDI in Insurance sector shall be permitted up to 49% subject to the revised conditions and a new activity viz. “Other Insurance Intermediaries appointed under the provisions of Insurance Regulatory and Development Authority Act, 1999 has been included within the definition of ‘Insurance’. Further, Foreign investment in Indian insurance company shall be limited up to forty-nine percent of the paid up equity capital and Foreign direct investment up to 26 percent shall be under automatic route and beyond 26 percent and up to 49 percent shall be with Government approval. An Indian insurance company shall ensure that its ownership and control remains at all times in the hands of resident Indian entities.


CBDT clarifies that no capital gain arises on roll over of Mutual Funds under Fixed Maturity Plans on extension of their term as per SEBI norms. The roll over in accordance with this regulation will not amount to transfer as the scheme remains the same. Accordingly, it is clarified that no capital gain will arise at the time of exercise of the option by the investor to continue in the same scheme. The capital gain will, however, arise at the time of redemption of the units or opting out of the scheme, as the case may be.

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