Sebi favours tax breaks for municipal bond subscribers: Official

The Securities and Alternate Board of India (Sebi) has approached the federal government to permit tax breaks for subscribers of municipal bonds which are essential for funding infrastructure growth on the grass-root ranges, a senior official mentioned on Tuesday.

The capital markets watchdog can even root for a tax break for municipal bonds throughout its assembly with the Finance Fee, Sebi whole-time member Ashwani Bhatia mentioned.

The regulator may quickly take extra steps to additional bolster investor safety within the futures and choices (F&O) phase, he added.

Bhatia was talking at an occasion organised by the Institute of Chartered Accountants of India (ICAI) within the nationwide capital.

Municipalities in India have raised solely Rs 2,700 crore by bonds for infrastructure tasks, which represents simply 0.6% of the nation’s general bond market, Bhatia mentioned.This pales as compared with the US municipal bond market of $4 trillion, representing 7% of the American bond market. Additionally, incomes from most municipal bonds within the US are exempt from tax.As for F&O, Bhatia mentioned, “Sebi could be very quickly going to do one thing about F&O. Research has come (not too long ago).”In a current session paper, Sebi has proposed seven measures to tighten the foundations for index derivatives. These embrace revision of the minimal contract measurement and requirement of upfront assortment of choice premiums.

These steps, consultants have mentioned, would enhance threat administration within the derivatives market.