Business / IDBI Bank Privatisation Nirmala Sitharaman plans tax waivers for IDBI Bank buyer

IDBI Bank Privatization Update: Big changes are being made by the government regarding the privatization of banks. Recently, the government had extended the deadline for filing initial bids for the privatization of IDBI Bank. After this, now another big update is coming out. Sources claim that the government is planning to give tax relief to the buyers of IDBI Bank. By giving relief in tax, the government is planning to attract more and more buyers for bidding. Bank's bid is likely to go up as more bidders appear.

Tax relief being considered

Sources claim that the Finance Ministry is considering giving tax relief to the buyers. This will give relief to the buyers of IDBI Bank from paying additional tax on the increase in share price after the final bid. Bank officials say that if there is an increase in the share price of the bank after the finalization of the financial bids, then it would be wrong to ask the buyer to pay tax on the increase in the price.

Buyers expected to make big profit

If the share price of IDBI Bank appreciates after finalization of the financial bids for the bank, the difference in the share price is treated as other income to the buyer. In this situation, along with 30% tax, surcharge and cess will also have to be paid. But there is a plan to wave off this tax from the government side. Due to which the buyers can get a big benefit.

Plan to sell 60.72 percent stake

Let us tell you that the government and LIC have 95 percent share in IDBI Bank. Recently, the Center had extended the deadline for filing initial bids for privatization of the bank to January 7. Government and LIC want to sell 60.72 percent stake. Earlier, the last date for inviting bids from potential buyers was December 16. It was increased to January 7 last days.

Carlyle Group, Fairfax Financial Holdings and DCB Bank are showing interest in the race to buy IDBI Bank. New buyers are expected to show interest after the new update from the government. Sources say that all these can bid for about 10 percent stake in IDBI Bank.