New Delhi: FM Nirmala Sitharaman on Friday announced withdrawal of enhanced surcharge on Foreign Portfolio Investments (FPIs).
Addressing a press conference along with top finance ministry officials at National Media Centre in New Delhi, Sitharaman said, there will be relief from enhanced surcharge from long and short term capital gains arising from transfer of equity, shares/units referred in section 111A and 112A respectively.
"In order to encourage investment in capital market, it is decided to withdraw enhance surcharge levied by the Finance No. 2 Act 2019. In simple words, the enhance surcharge on FPI goes, surcharge on domestic investors in equity goes. Pre-budget position is restored," FM said.
The FM announced that surcharge on domestic investors in equity markets will also be withdrawn.
Investors have been spooked by the sustained sell-off by FPIs. The Lok Sabha had in May passed the Finance Bill, 2019 during which FM Sitharaman ruled out tweaking the FPI surcharge. Sitharaman had emphasised that 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. FPIs had pulled out Rs 16,000 crore from the market in July.