Senior officials of domestic asset managers to be hit hard by I-T surcharge

Senior officials of domestic asset managers have historically drawn high salaries and will be hit hard. For instance, HDFC MF managing director Milind Barve and chief investment officer Prashant Jain’s annual remuneration for FY19 stood at Rs 7.2 crore each. 

ICICI Prudential MF’s MD and CEO Nimesh Shah took home Rs 6.25 crore. The industry also routinely gives one-time payments and ESOPs that could amount to a sizeable amount in a particular year. 

For instance, Motilal Oswal Asset Management MD and CEO Aashish Somaiyaa’s total remuneration for FY19 was Rs 39.6 crore. 

This included a one-time payment owing to cumulative vesting of equity shares earned over the last 6.5 years, which materialised in FY19.

Experts believe the tax impact could be reduced if the one-time payments are deferred and vested ESOPs are not exercised.

“Employees can defer exercising their vested ESOPs to avoid the surcharge if they believe the tax will reduce in future. Employers can contribute a higher amount paid as salary to the National Pension Scheme as it is not taxable in the hands of employees,” said Amit Maheshwari, partner, Ashok Maheshwary & Associates.