With the reports of economic slowdown and huge outcry from business sector and pressure from investors mounting, Union Government seems to be bowing down to the pressure. The government is contemplating to exempt the Foreign Portfolio Investors (FPIs) from the Super Rich Tax. As per media reports, government is planning to withdraw the higher tax surcharge on FPIs. A senior official in the government, on condition of anonymity, divulged that the government is taking steps to curb the economic slowdown.
“Prime Minister Narendra Modi’s administration is finalising a package to reverse the economic slowdown,”a senior government official was quoted as saying. The immediate step could be the likely exemption to FPIs from a tax on super rich that was announced in the Budget by Finance Minister Nirmala Sitharaman.
Nirmala Sitharaman is addressing the media today and she could make some positive statements to ease the business sector. Indian markets are down about 10 percent from their June highs after Finance Minister Nirmala Sitharaman announced higher surcharge on FPIs, who have sold Indian stocks (net) worth over USD 3 billion over last two months.
In the 2019-20 Budget, Nirmala Sitharaman had increased surcharge from 15% to 25% on taxable income between INR 2 crore and 5 crore, and from 15% to 37% for income above ₹5 crore. It was also applicable for FPIs operating as trusts or as association of persons.
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