Surcharge on some IPF to stay, says Sitharaman
NEW DELHI: The government on Thursday maintained its position of imposing a surcharge on some foreign portfolio investors (FPI), with FM Nirmala Sitharaman making it clear that this class of foreign investors had the option of restructuring their operations to reduce the tax burden.
In response to the debate over the finance bill in Lok Sabha, Sitharaman said that FPIs that function as trusts could consider being registered as companies. In its first budget submitted to Parliament on July 5, Sitharaman had charged a surcharge to the super-rich, those who earned between Rore 2 and Rs 5. The measure had affected the FPIs faced with the prospect of a growing fiscal burden . The financial markets had also reacted negatively to the measure. There is also an FPI problem in which you try to include the HUF tax deduction in TDS. It has an impact on those FPIs that are registered as a trust. There is an option for the FPI to register as a company. But when you're registered as a company, you do not have a tax problem that we're talking about, he said. Sitharaman also rejected the opposition's demand to stop using Petroldiesel and scrap the 2% TDS on cash withdrawal, stating that the Budget was aimed at improving the ease of life.
The FM also said that a working group on the new Direct Tax Code (DTC) will present its report before the end of the month. The new DTC is configured to replace the existing Income Tax Law. The goal is to reform the complex income tax laws into simpler tax codes with reduced rates, fewer exemptions and tax slabs. The working group is already working to finalize the report on a new Direct Tax Code that must be submitted before July 31. The government will receive the report and we will send you a call, he said, while answering a question. by NCP MP Supriya Sule , during the debate on the Finance Bill 2019. Previously, the working group was to present its report before May 31, but the then Minister of Finance Arun Jaitley He gave a two-month extension to complete the exercise.
Sitharaman said that seven indirect tax laws are being amended to ensure greater simplicity, since she introduced the Finance Bill in Lok Sabha. She told the House that the amendments to the laws are being made through the Finance Bill in five main categories, including the GST.