The government will soon issue a clarification on applicability of increased surcharge on foreign portfolio investors, a tax official said Monday.
There were concerns that the super-rich tax surcharge could also affect foreign funds investing in India since a same tax structures applies for individuals, Hindu Undivided Family and Associations of Persons.
Experts said some FPIs follow trust structure and hence would be classified as AOPs. "The matter has been brought to our notice now. We will issue a clarification soon," Central Board of Direct Taxes Chairman PC Mody said at an Assocham event.
The Union Budget 2019-20, tabled by Union Finance Minister Nirmala Sitharaman in Parliament Friday, proposed to a super-rich tax surcharge on taxable income above Rs 2 crore.
Following the increase in surcharge, the effective income tax rate for individuals with taxable income of Rs 2-5 crore will go up from 35.88 percent to 39 percent, and for those above Rs 5 crore it would go up to 42.7 percent.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
