Stock markets crash due to LTCG

NewDelhi Feb 3: The Finance minister on Thursday has presented the budget and the FM has introduced long-term capital gains tax at 10 % and the effect was felt on the stock market.

The Sensex plunged about 840 points, or 2.3%, to close at 35,066.75 on Friday meanwhile Nifty declined about 256 points, or 2.3%, to end at 10,760.60.

Many investors have rushed to sell off their stocks fearing high amount of tax to be paid if the income exceeds Rs 1 lakh. Sources said that "Friday's crash wiped off Rs 4.6 lakh crore from the market value of listed Indian stocks."

However, the Finance Minister has said that "Ultimately, the world recognizes the size of India. The fact that we have a sound economy, the fact that we have the fastest-growing economy, how well our companies are doing, what are the kind of returns Indian markets are going to offer in the long run and the kind of investment, we think the market moving up and down for a couple of days is something we have now learnt to live with ."

He added that "Wealthy investors cannot enjoy tax exemptions for long".