Decision on transaction tax soon: Chidambaram

The Finance Minister said he would "revisit" numbers on 0.15% transaction tax proposed in Budget but ruled out total withdrawal.

Government on Monday said it would "revisit" the numbers on 0.15 per cent transaction tax on all securities proposed in the Union Budget but ruled out total withdrawal of the measure saying it is "neat and eliminates tax avoidance".

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"I have already said we will be revisiting the numbers. But transaction tax is neat, easy and eliminates tax avoidance," Finance Minister P Chidambaram said in his brief intervention during the Budget discussion in Rajya Sabha.

He said market capitalisation of shares traded amounted to Rs 300,000 crore which meant there should be a tax collection of at least Rs 25,000 crore annually in securities transactions but short term capital gains tax mop up did not reflect this.

Rebutting the criticism by BJP leader and former Finance Minister Yashwant Sinha that the transaction tax proposed in the Budget was not a well thought of measure, Chidambaram wanted to know from the Opposition whether they supported this move aimed at eliminating tax avoidance.

"What I wanted to know whether you support the principle," Chidambaram asked to which Sinha evaded a direct reply and said BJP supported all those measures that former Finance Minister Jaswant Singh took towards abolishing capital gains tax in a bid to boost capital market.