Global cues rather than the imposition of Long Term Capital Gains Tax (LTCG) on shares has led to a plunge in the equity markets.
According to Finance and Revenue Secretary Hasmukh Adhia, equity investments still remain attractive as only a 10 per cent LTCG tax has been imposed on it.
Adhia, who addressed a CII event here on Monday, said that in comparison to other asset classes the LTCG tax is lower on equities and the government has decided to "grandfather" gains made until January 31, 2018.
On February 1, Finance Minister Arun Jaitley proposed to tax LTCG on equities exceeding Rs 1 lakh at 10 per cent, which is expected to bring in revenue of Rs 20,000 crore.
However, capital gains made on shares until January 31, 2018, will be "grandfathered" and those from holding them up to one year will remain taxed at the rate of 15 per cent.
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On Monday, the barometer Sensex of the BSE opened over 400 points down -- slipping below the important 35,000-level -- as investors continued to book profits.
The other key index -- NSE Nifty50 -- dropped over 150 points on opening.
Market observers pointed out that global cues, along with heavy selling pressure in banking, capital goods, auto and oil and gas stocks, pulled the equity indices lower.
--IANS
rv/in
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