FIIs fear higher tax outgo

Foreign institutional investors have approached the finance ministry looking for an extension of the ‘feedback window’ on the new direct tax code. People familiar with the issue said that the deadline for submitting feedback has lapsed. Terming the ‘window’ insufficient for a detailed response, FIIs have asked for an extension.

There is a perception that if implemented, the direct tax code could increase tax liabilities of foreign portfolio managers significantly. So far in 2009, FIIs have pumped in $8.6 billion into Indian equities.