Relief for FPIs: Capital gains on debt securities now exempt from surcharge

The government on Friday exempted foreign portfolio investors (FPIs) that make capital gains on debt securities from the higher surcharge that was introduced in the Budget. This will bring relief to scores of funds.

“The enhanced surcharge shall also not apply to capital gains arising from the sale of any security, including derivatives, in the hands of FPIs,” observed a note by the finance ministry.

The announcement comes a month after the surcharge on income earned from equities and derivatives was scrapped. Debt funds, which make capital gains from trading in government or corporate bonds, will be the beneficiaries. 

“The government has made