PM Modi's Cabinet scraps capital gains tax on government securities
India is set to make it easier for foreign portfolio investors (FPIs) to put money into government securities by scrapping the capital gains tax on these investments.
The Cabinet, led by PM Modi, approved an ordinance to help boost foreign capital and steady the rupee, which has been under pressure lately thanks to global conflicts.
Foreign portfolio investors recorded ₹2.47L/cr outflows
Until now, foreign portfolio investors (FPIs) had to pay a 12.5% capital gains tax if they held listed shares and bonds for over a year, plus a 20% withholding tax on interest earned from government bonds.
With FPI outflows hitting ₹2.47 lakh crore this year and the rupee briefly dropping to record lows, this move aims to make investing in India more attractive and keep markets stable.
Regulators are expected to initiate further measures.