FPIs that register as cos to be out of surchage ambit: Sitharaman

TIL Desk/Business/New Delhi/ Finance Minister Nirmala Sitharaman has said those FPIs who wish to be out of the net of the surcharge on high networth individuals may consider the option of structuring as companies as the foreign portfolio investors registered as trusts will have to pay the new tax surcharge.

The Lok Sabha on Thursday passed the Finance Bill, 2019. The market — BSE Sensex which has borne the brunt of this tax as FPIs are on a selling spree — is likely to react and enter into red tomorrow. In Closing Bell, the late sell-off by FPIs dragged the Sensex 318 pts, Nifty below 11,600. All sectoral indices ended in red with Auto, Metal and PSU Bank indices falling 2.5-3 per cent.

Ruling out tweaking the FPI surcharge, she said trusts should register as companies to be out of the ambit of the surcharge. The Budget had proposed levy of an additional surcharge on individuals and trusts earning more than Rs 2 crore and Rs 5 crore, respectively.

“Some FPIs are registered as trusts. Therefore as an individual entity he comes under the taxation. Such FPIs who have registered themselves as trusts may consider the option of wanting to move to register as company”, she said in reply to Finance Bill, 2019.