Zee Media Bureau
The BSE benchmark Sensex closed below 25,600-mark by plunging over 175 points Wednesday due to nervous selling by foreign funds amid a revised tax treaty between India and Mauritius imposing capital gains tax on investments routed through the latter from April next.
The NSE Nifty also slipped 38.95 points to 7,848.85.
Brokers said sentiment dampened after India yesterday signed with Mauritius an amendment to the pact to get rights to tax capital gains on shares of Indian company sold after April 1, 2017, triggering fresh spell of selling by participants.
With the signing of the amendment to the Double Taxation Avoidance Convention (DTAC) with Mauritius, sale of shares of an Indian resident company will be taxed at 50 percent of the applicable rate between April 1, 2017, to March 31, 2019. Full capital gains tax will apply from April 1, 2019.