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    FM Nirmala Sitharaman rules out clarity on FPI surcharge

    Synopsis

    Asked if the govt would clarify on the issue, the minister said she would respond in Parliament.

    Through their unambiguous and firm mandate they have reaffirmed “putting the nation first”. The people of India have validated the two goals for our country’s future: that of national society and economic growth.
    Finance minister Nirmala Sitharaman has ruled out an immediate clarification on the proposed increased super rich surcharge being applicable to foreign portfolio investors.

    Fears over applicability of the proposed higher tax on foreign portfolio investors structured as trusts spooked the stock markets on Monday, shaving 793 points, or 2%, off the benchmark index Sensex.

    “I don’t think clarification at the moment is all that required. Let’s see as it goes. You think it is required? Will take it as it comes,” she said at a press conference after addressing the customary post-budget board meeting of Reserve Bank of India in the capital.

    Asked if the government would clarify on the issue, the minister said she would respond in Parliament. “I don’t want to sound like a stickler for rules, but this is an answer that I’d rather give in the Parliament.” The minister’s statement came hours after Central Board of Direct Taxes chairman PC Mody said at an Assocham conference that the government will issue a clarification soon. “The matter has been brought to our notice now. We will issue a clarification soon,” Mody said earlier in the day.

    There are concerns that foreign portfolio investors that have set up trusts to invest in India could be classified as an Association of Persons, a category covered by the proposed increased surcharge.

    Following the increase in surcharge, the effective income tax rate for individuals with taxable income of Rs 2-5 crore will go up to 39% from 35.88% and for those above Rs 5 crore to 42.7%.

    According to reports, about 2,000 FPIs operate as trusts. CBDT chief Mody said the board is collecting facts on the matter.

    On moving the regulation of housing finance companies to the Reserve Bank of India, the finance minister said the government is of the view that the central bank is better equipped to handle HFCs.

    Quotable quotes from Nirmala's maiden Budget

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    Putting the Nation First

    Through their unambiguous and firm mandate they have reaffirmed “putting the nation first”. The people of India have validated the two goals for our country’s future: that of national society and economic growth.

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    35 Comments on this Story

    Ramesh Ramchandani400 days ago
    I am under no obligation to respond, to clarify. ''''No comments and will clarify in parliament " is arrogant! I thought having such a responsible position and being part of the G20 group , she may start to believe in global economy and free trade but her stance and defiant stubborn nature, it is difficult to change colours! Sad that when India needs growth and jobs, She takes on taxing higher income earners and FPI''S - THE one''s that create opportunities!
    jhon cena401 days ago
    Well I don''t think that there should be any doubts left in anyone''s mind now, it''s the bureaucrats who are making these policies.
    FM seems to be clueless, someone has bring Mr. Piyush Goyal to the FM chair or bring in Mr. Swamy.
    Vijay Mehra401 days ago
    In a way it is good if FPIs are also taxed.They systematically manipulate the markets and indulge in insiders trading.Sometimes they become bulls while other time they turn bears. Thus sqeasing the common investors.
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