Restoring the pre-Budget position, Sitharaman said the surcharge on long and short-term capital gains arising from transfer of equity shares has been withdrawn.
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New Delhi: Giving in to the demands of overseas investors, Finance Minister Nirmala Sitharaman on Friday announced a rollback of enhanced surcharge on foreign portfolio investors (FPIs) levied in the Union Budget.
Surcharge on long and short term capital gains arising from transfer of equity shares has been withdrawn, Sitharaman said. “The pre-Budget position is restored,” she said, adding that it was being done to encourage investment in the capital market.
The decision taken in the Budget to levy enhanced surcharge had spooked the stock markets.
Following the increase in surcharge in the Budget, the effective income tax rate for individuals with taxable income of Rs 2 crore to Rs 5 crore went up to 39% from 35.88% and for those above Rs 5 crore to 42.7%.
Earlier this month, capital market participants and foreign institutional investors presented a charter of demands to Sitharaman, which included rollback of surcharge on FPIs and review of dividend distribution tax.
Sitharaman further said that to mitigate genuine difficulties of start-ups and their investors, it has been decided to withdraw angel tax provisions for them.
A dedicated cell under a member of CBDT too will be set up for addressing the problems of start-ups.
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Source: News18