The Narendra Modi led central government is mulling on withdrawing higher surcharge applicable on foreign portfolio investors (FPIs) and may soon issue either a notification or ordinance in this regard, ET NOW has reported.
In case of the government issuing an ordinance, the Parliament would debate over it in the next session.
This decision was reportedly taken by Finance Minister Nirmala Sitharaman following a meeting with the Prime Minister’s Office (PMO). This proposal would now be vetted by the Ravi Shankar Prasad led Law Ministry.
During the Union Finance Budget in July, Sitharaman had announced an additional surcharge on the “super-rich” earning over Rs 2 crore per year. Consequently, FPIs - many of whom would have been liable to pay the surcharge had embarked on a selling spree.
The FPIs are generally structured as non-corporate entities like trusts and associations which attract taxation similar to that of individuals.
Sitharaman later advised them to register as companies to avoid coming under the ambit of the surcharge, which did little to quell their worries.