Modi government wants to tax Jane Street's profits: Report
What's the story
Indian tax authorities are examining global trading giant Jane Street's operations in India following regulatory actions. The investigation comes after a July 3 interim order from the Securities and Exchange Board of India (SEBI). Financial statements submitted to the government show that Indian officials have recommended denying benefits under a tax treaty with Singapore, according to Economic Times.
Tax implications
Recommendations to invoke general anti-avoidance rules
The investigation unit of the Income Tax Department has recommended invoking general anti-avoidance rules. They have also suggested that Jane Street's profits in India should be taxed as capital gains. The recommendation comes after examining the firm's profits during a period under the SEBI's scrutiny for an alleged market manipulation.
Allegations
SEBI accused Jane Street of manipulating markets
SEBI has accused the US-based trading firm and its entities in India, Singapore, and Hong Kong of manipulating markets. The regulator has ordered Jane Street to disgorge over ₹48 billion in what it calls "illegal gains." While Jane Street complied with SEBI's order, it has denied the regulator's allegations and plans to exercise its legal right against them.
Financial performance
Financial performance amid ongoing probe
Despite the ongoing investigation, Jane Street has reported strong financial performance. The firm earned almost $7 billion in trading revenue in Q3. It started trading equities, stock futures, as well as index options in India after the pandemic.