Investment by Indians in controlled foreign corporations (CFCs) will be liable to wealth tax, once the Direct Tax Code becomes law, reports the Economic Times.
Under the DTC, an entity is considered a CFC when one or more persons residing in India exercise control over a foreign company, reports the Economic Times.
Many Indian companies have investments in CFCs and DTC is proposing to tax these investments, notes the Times.
The provision to tax productive assets will be implemented once the Direct Tax Code regime, which seeks to replace the Income Tax Act, 1961, is implemented from April 2012.
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