Report of the Working Group on Direct Listing of Listed Indian Companies on IFSC Exchanges

IFSCA on 20.12.2023 has issued Report of the Working Group on Direct Listing of Listed Indian Companies on IFSC Exchanges. The working group has made following recommendations for listed companies in IFSC:

1. The tax on dividend may be reduced to 10% for shareholders in IFSC. This would be in line with the DR framework.
2. Going forward, trading of Right Entitlements (RE) issued on equity shares listed on IFSC exchanges, may also be included in the list of specified securities under section 47(viiab) of the IT Act.
3. The exemption from obtaining PAN and return filing may be extended to the eligible foreign investors even if they earn dividend income from the shares of Indian companies listed on IFSC exchanges, provided the Indian companies have appropriately withheld taxes on such dividend income at applicable rates. This can directly be applied by introducing the aforesaid dividend rate under section 115A(1) read with section 115A(5) of IT Act.