Financial Daily from THE HINDU group of publications
Saturday, May 20, 2006


News
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

Home Page - Taxation
Markets - Foreign Institutional Investors


Bring back long-term capital gains tax: CPI(M)

Our Bureau

`Review double taxation avoidance pact with Mauritius'


Market alert
The CPI (M) also cautioned against going ahead with capital account convertibility.
Calls for steps to protect the small investors who suffer the most from market meltdowns.


MR SITARAM YECHURY

New Delhi , May 19

The CPI (M) leader and Rajya Sabha MP, Mr Sitaram Yechury, on Friday demanded reintroduction of long-term capital gains tax on investment in stocks and review of the double taxation avoidance agreement (DTAA) with Mauritius through which most of the FII investments in India are routed.

His comments came in view of the more than 1,300 points fall in Sensex during the past two trading sessions.

"While only a miniscule minority of Indians have benefited from the stock price bubble in India, the rich have got richer through untaxed capital gains. Reintroduction of the long-term capital gains tax and review of the DTAA with Mauritius are the need of the hour.

"Steps are also required to protect the small investors in the stock market who suffer the most from market meltdowns," he said. Stating that the FIIs have taken advantage of the liberal taxation regime to make enormous speculative profits, Mr Yechury told presspersons that "it is a matter of great concern that media reports regarding a circular by the CBDT, containing instructions to assessing officers to help them distinguish between traders and investors, caused such panic and led to a massive pullout of funds by the FIIs."

The CPI (M) also cautioned against going ahead with capital account convertibility on the plea that the asset price boom taking place in the country for the last two years had revealed the volatile nature of the stock market.

"In the context of the continuing rise in international oil prices, currency depreciation following capital outflow is bound to cause inflationary pressures on the economy and hit the common man hard.

"In the light of the volatility being experienced in the capital market, the CPI (M) warns the Government against going ahead with capital account convertibility, which would further imperil the stability of our financial system," he said.

Related Stories:
Implications of capital gains giveaway
Double tax avoidance treaties — Impact on security transactions
CAG faults tax treatment of FII income from stocks

More Stories on : Taxation | Foreign Institutional Investors | Politics | Stock Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
Inflation rises to 3.96 pc on higher energy prices


Birla-Lodha tussle: Calcutta HC appoints four administrators
Bring back long-term capital gains tax: CPI(M)
SBI net rises marginally in 2005-06 at Rs 4,407 cr
Tata Motors clocks 18 pc growth in Q4 net, to pay Rs 13
The bear party continues
Broking firms stop fresh buying by clients
European cos plan to increase offshoring assets: IDC
Siemens in pact with Huawei-3Com



The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line