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Market rally amid tax tension
Finance Minister P. Chidambaram will meet stock brokers in Delhi on July 13 to discuss their concerns over the 0.15 per cent turnover tax, a spokesman of the Securities and Exchange Board of India (SEBI) said on Friday.
Finance Minister P. Chidambaram will meet stock brokers in Delhi on July 13 to discuss their concerns over the 0.15 per cent turnover tax, a spokesman of the Securities and Exchange Board of India (SEBI) said on Friday.
The turnover tax, proposed in Thursday’s budget, will be a charge on every share transaction and will have to be paid by the buyer.
Earlier in the day, a group of brokers held a demonstration to protest against the proposed tax. Their representatives then met SEBI chairman G.N. Bajpai to communicate their views on the turnover tax. Bajpai reportedly assured them that he would convey their concerns to the finance minister.
He also reminded them that the tax would kick in only after the Finance Bill is passed and notified, which is likely to happen around three months later.
A range of brokers expressed their apprehensions about the proposed tax.
"The turnover tax will hit the arbitrager and day trader most, while small investors and FIIs will not be affected much, since the minister has abolished the long-term capital gains tax and reduced the short-term capital gain to 10 per cent," said Asit Koticha, managing director of ASK Raymond James.
"The FM should have introduced such a tax with lower slabs rather than imposing a hefty 15 basis points at one go," said Arun Kejriwal, an equity expert.
Despite the apprehensions of the brokers, the stock market rallied on Friday. The Sensex, which had fallen by over 100 points on Thursday, closed at 4,954.86 points, up 101.64.
The NSE Nifty jumped 2.34 per cent to close at 1,553.20 points.
