Moneycontrol Be a Pro
Get App
you are here: HomeNewsEconomyPolicy
Last Updated : Aug 20, 2019 02:42 PM IST | Source: Moneycontrol.com

Higher tax surcharge on super-rich: FPI lobby sends wishlist to government

FPIs are categorised based on their risk profiles with category-III including trusts, charitable societies and family offices among others.

Moneycontrol News @moneycontrolcom

With the issue of higher tax surcharge proving to be a thorn, a lobby of FPIs has urged the government to use information on beneficiaries to identify them and spare broad-based entities, according to a report in The Economic Times.

A spokesperson for Asia Securities Industry & Financial Market Association (ASIFMA) told the paper that the government should identify and target wealthy individuals rather than an entity with multiple beneficiaries under category-III FPIs.

FPIs are categorised based on their risk profiles with category-III including trusts, charitable societies and family offices among others. Category-I has to do with government and government-related investors and category-II includes regulated funds like pension and endowment funds.

Close

The Budget proposal to impose a higher tax surcharge - from 15 percent to 25 percent for incomes between Rs 2 crore and Rs 5 crore and from 15 percent to 37 percent for higher incomes - on non-corporate FPIs  had rattled the market. According to NSDL data, overseas investors withdrew Rs 3,002 crore in July.

However, experts in the report feel that it might not to be practically viable to tax ultimate beneficiaries. Senior chartered accountant Dilip Lakhani thinks that tax laws under jurisdictions and treaties with India will impose a problem as beneficiaries are scattered.

Experts also urged the government to find ways to achieve tax objectives while not adversely affecting non-corporate FPIs because of their structure. ASIFMA points out that under GAAR (General Anti-Avoidance Rules), all trusts might not be able to convert their structure to a corporate if the purpose of conversion is solely for tax avoidance.

The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .
First Published on Aug 20, 2019 02:41 pm
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant