- The government might issue a notification or an executive order to exempt FPIs from the increase in surcharge on super rich taxpayers
- Finance minister Nirmala Sitharaman had recently said the government is open to hearing out the grievances of FPIs
The government is likely to exempt foreign portfolio investors (FPIs) from an increase in taxes that was part of the budget, news agency Reuters reported, citing sources. The government will either issue a notification or an executive order, which could be later submitted to parliament for approval, to exempt the foreign portfolio investors, mainly registered as trusts, from the increase in surcharge on super rich taxpayers, the report said.
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The government had earlier this week said it would soon hold discussions with representatives of foreign portfolio investors, amid continuing overseas fund outflow from the markets following the decision to impose surcharge on certain class of such investors.
In July, FPIs had withdrawn a net amount of ₹2,985.88 crore from the capital markets. The Sensex is down over 6% since the budget was tabled on July 5.
In the 2019-20 Budget, the government decided to increase surcharge from 15% to 25% on taxable income between ₹2 crore and ₹5 crore, and from 15% to 37% for income above ₹5 crore. It would also be applicable for FPIs operating as trusts or as association of persons.
Source: Livemint
