Govt mulls more steps to boost market sentiment, may scrap DDT, rejig LTCG

Officials believe DDT is acting as a hindrance to the inflow of foreign investment in the country; govt has been discussing the matter with regulators

The finance ministry and regulators are reviewing the possibility of scrapping the dividend distribution tax (DDT) in a bid to regain investor confidence in the equity markets, said sources in the government. It is also considering rationalisation of the long-term capital gains (LTCG) taxation structure by classifying three asset classes against six at present.

The government and regulators have had a few rounds of discussion over the taxation system for share markets in the past few days, said official sources, adding that the government feels the DDT might be acting as a hindrance to the inflows of foreign investment in