Surcharge hike may stop overseas fund managers from shifting to India

Several fund professionals based in India could also relocate to other jurisdictions, resulting in a brain drain

The recent hike in surcharge may dissuade overseas money managers from shifting to India and result in a flight of senior fund professionals, who advise global private equity players, to countries such as Singapore and Hong Kong, which have far lower personal income tax rates.

Several offshore fund managers of Indian origin, who manage the India units of their global portfolios, have been keen to shift to the country as it will enable them to locally connect with bankers, analysts, institutional investors, as well as the company’s management.

The shift was not possible because of the adverse tax impact, given