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Govt's reform push: Business income may also see surcharge relief

Taxes had risen for foreign portfolio investors (FPIs) and others following surcharges introduced in the Budget

Sachin P Mampatta & Ashley Coutinho  |  Mumbai 

FPIs
Total inflow in Indian debt has been Rs 63,490 crore

Some on Friday said they feared taxation on business income will continue at 42.7 per cent, following the initial announcement.

Taxes had risen for foreign portfolio (FPIs) and others following surcharges introduced in the Budget.

The exemption from the surcharge, mentioned during the announcements on government measures to revive the economy on Friday, applied only to capital gains tax, experts had noted.

having business income will still be affected. Also it has to be noted that this surcharge goes only for capital gains generated on listed shares and not on unlisted shares,” said Amit Maheshwari, partner, Ashok Maheshwary & Associates.

Govt's reform push: Business income may also see surcharge relief

Rajesh H Gandhi, partner, Deloitte India, said, “It remains to be seen whether the benefit will be extended to derivative income if that is treated as capital gains. Also it seems that the increased surcharge will continue to be applied to interest income.”

Finance Minister Nirmala Sitharaman on Friday announced a reversal of surcharges introduced in the Budget. This included removing surcharges imposed on domestic and foreign The move applies to taxation under sections dealing with long-term capital gains and short-term capital gains, according to officials in response to a question during the press conference on its applicability.

This did not cover business income, though it will reduce taxes for the rest. A subsequent clarification mentioned “the enhanced surcharge shall be withdrawn on tax payable at special rate by both domestic as well as foreign investors on long-term and short-term capital gains... and also on tax payable at special rate under Section 115AD by the FPI on the capital gains arising from transfer of derivatives.”

First Published: Sat, August 24 2019. 01:24 IST
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