As for short-term capital gains, the effective tax rate has gone up from 17.94% to 19.5% for those earning between Rs 2 crore and Rs 5 crore, and to 21.3% for the ones earning over Rs 5 crore.
The effective tax rate on short-term gains from unlisted securities and derivatives will now be 39% for the Rs 2-5 crore group, and 42.74% for the Rs 5 crore group.
On Sunday, the Press Trust of India reported that over 77 billion Indian rupees ($1.1bn) had been pulled from Indian equities between 1-19 July. The news agency cited depository data.
Restructuring global funds only for Indian tax reasons is not a joke"
Commenting on the massive withdrawal from equities, Himanshu Srivastava, senior analyst manager research at Morningstar said:"FPIs have been on a selling spree ever since government proposed ‘super-rich' tax in its budget and with no respite in sight from the government, the quantum of net outflows shot up."
Sunil Gidwani, partner, financial sector, Nangia Advisors (Andersen Global), said: "Restructuring global funds only for Indian tax reasons is not a joke. No one in government seems to appreciate that just as our mutual funds are formed as trusts because regulations require them to be so, in various countries funds are set up as trusts because of home country regulations, industry practice, and commercial reasons and not because they see an advantage in India earlier."