The Sensex will settle at 3500 levels before the Union Budget is announced, according to the Bombay Stock Exchange (BSE) president, M G Damani. He was speaking at a press meet where he discussed the suggestions he made to the prime minister at a meeting of eminent industrialists and economists held on 31 December, 1996. The participants were invited to give suggestions on ways to invigorate the economy and revive the capital markets.
Among the most important suggestions that Damani had made at the meeting was making long term capital gains tax rate for Indian companies, Indians and NRIs uniform with that for FIIs (10 per cent), which would then attract NRI investments, allowing a one-time exemption for brokers who convert themselves into corporate entities, the removal of MAT or treating it as advance tax and remove tax on dividends distributed by tax paying companies. He had also advocated the encouragement of forward trading.
``The suggestions on capital gains tax as well as the one concerning double taxation of dividend was unanimously seconded by the other speakers, and I expect these to be accepted, Damani said.
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Damani stressed on the amending of the Stamp Act and doing away with multi-point taxation every time securities are traded and an exemption from long term capital gains tax in case the sale proceeds of assets are invested in productive assets.
Among the other suggestions made by Damani were the strengthening of the Indian financial institutions hold on the Indian market.