Govt to soon issue clarification on applicability of surcharge on FPIs: CBDT chief
On whether the clarification will be issued soon or after discussion on Budget in Parliament, Finance Minister Nirmala Sitharaman said it is not required at the moment
PTI New Delhi Last Updated: July 8, 2019 | 23:50 IST
CBDT Chairman P C Mody Monday said the government will soon issue a clarification on the increase in tax rate on foreign portfolio investors to allay their concerns.
On whether the clarification will be issued soon or after discussion on Budget in Parliament, Finance Minister Nirmala Sitharaman said it is not required at the moment.
"I don't think clarification at the moment is all that's required. Let's see as it goes. You think it is required?" she said.
There were concerns that the increased surcharge on super-rich could also affect foreign funds investing in India since a same tax structures apply for individuals, Hindu Undivided Family and Associations of Persons (AoPs).
In the Budget 2019-20, tabled in Parliament last week, Sitharaman proposed to increase surcharge from 15 per cent to 25 per cent on taxable income between Rs 2 crore and Rs 5 crore, and from 15 per cent to 37 per cent for income above Rs 5 crore.
The effective income tax rate for individuals with a taxable income of Rs 2-5 crore will go up from 35.88 per cent to 39 per cent, and for those above Rs 5 crore, it would go up to 42.7 per cent.