Shares of brokerage frims gained as much as 4.3 per cent after the government today proposed a slew of measures in order to boost the capital market.
IL&FS Investmart Limited surged 4.32 per cent, Geojit BNP Paribas Financial Services rose by 3.39 per cent and Edelweiss Financial Services was up 1.43 per cent on the BSE.
To remove uncertainty in taxation of Foreign Portfolio Investors (FPIs) and to encourage their fund managers to shift to India, the Budget has proposed to provide that income arising to them from transaction in securities will be treated as capital gains.
Concessional rate of 15 per cent on foreign dividends without any sunset date will be continued, the FM said while presenting the Budget.
The government has proposed introducing uniform KYC (Know Your Customer) norms with inter-usability of the KYC records across the entire financial sector and a single demat account so that consumers can access and transact all financial assets through this one account.
FPI encompasses all foreign institutional investors (FIIs), their sub-accounts and qualified foreign investors (QFI) under a new regime which has been effective from June 1.
According to the FM, FPIs that have invested more than Rs 8 lakh crore (about USD 130 billion) in India are concerned over uncertainty in taxation on account of characterisation of their income.