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global consumption, and are fore- casted to account for two-thirds by 2030, a Sun Life Global Invest- ments white paper says. India and other EMs also tend to have high savings rates, which means citizens have capital to fuel the economy in the future. India’s average savings rate as a percent- age of gross national income is about 18% compared to Canada’s roughly 2.4%. As consumption growth extends to growth in education spending, India’s economy will continue to transform from agriculture to manufacturing to technology. The country is second only to China in its number of graduates in science, technology, engineering and mathematics (2.6 million grads in 2016 compared to 568,000 in the U.S.). Economic transformation results in “more diverse, resilient economies and more diverse, developed stock markets,” the paper says. India has two stock exchanges: the Bombay Stock Exchange (right), founded in 1875, which has more than 5,000 listed firms; and the National Stock Exchange, founded in 1992, with more than 1,600 firms. Foreign individuals can invest in these markets through foreign institu- tional investors, such as asset management companies. A worker checks mobile phones at a Lava phone factory in Noida Taxation highlights Corporate Income: Tax is imposed on business/trading income, passive income and capital gains at a standard rate of 30% Dividends: 15% grossed up to 20.6% Capital gains: Generally, 10% on long-term gains on listed shares and specified securities not subject to securities transaction tax (STT, which is a transfer tax). “Long term” means those assets are held for more than a year. Short-term gains on those assets that are sub- ject to STT are taxed at 15%. Individuals Income: Progressive up to 30% plus a cess of 4%. A surcharge of 10% or 15% applies if income exceeds 5 million or 10 million, respectively. 300,000 is exempt; for those over 80, 500,000 is exempt. India’s latest budget proposes tax relief for those with an annual income of 250,000 to 500,000. Capital gains: Same as for corporations Dividends: Dividends subject to corporate divi- dend tax are generally exempt Interest: Generally, a 20% withholding tax applies when interest is paid to a non-resident on a foreign currency borrowing or debt, and 30% applies in some cases. Withholding tax on inter- est is 5% when paid to a non-resident on specific borrowings in foreign currency and on invest- ments made by a qualified foreign investor in a rupee-denominated bond of an Indian company, or in a government security. Inheritance or gift tax: None Minimum alternative tax: 18.5% of adjusted total income, where normal income tax payable is less than the minimum alternative tax. Adjusted total income must exceed 2 million. Among the countries of origin of recent Canadian immigrants, India takes the second spot, with 147,190 IMMIGRANTS between 2011 and 2016, representing more than 12% of immigrants during this period. (The Philippines is number one.) Source: Statistics Canada Economy GDP (purchasing power parity): $9.5 trillion (2017 estimate) GDP growth: 6.7% (2018) Inflation rate: 4.9% (2018) GDP per capita (PPP): US$7,200 (2017 estimate) Unemployment rate: 8.5% (2017 estimate) GDP by sector (2016 estimates) Services: 61.5% Agriculture: 15.4% Industry: 23% Exempt income: The first 250,000 is exempt. For resident seniors aged 60 to 79, the first Source: CIA World Factbook, World Development Indicators database Source: Deloitte’s India Highlights 2019 ADVISOR.CA 19 A vendor carries bunches of bananas at a wholesale market in Chennai SAJJAD HUSSAIN / AFP / GETTY IMAGES ARUN SANKAR / AFP / GETTY IMAGES PUNIT PARANJPE / AFP / GETTY IMAGES