Finance Minister announced
to roll back so-called draconian measure to implement provisions of GAAR
(general anti avoidance rules) during the discussion in parliament on Finance
Bill, 2012, on 7th May 2012. This came as a big relief for the market
participants and especially p-notes and FIIs investing/trading on Indian
exchanges via Mauritius. Markets recovered from more than 300 points losses on
this announcements on Monday, however declined sharply 2% on Tuesday, undoing
all the expected and deemed positive impacts of this announcement.
Below are the main
highlights:
ü GAAR
provisions deferred for a year.
ü Investment
in start ups by angel investors exempted from tax.
ü Goods
already taxed by states to be exempted from service tax.
ü Withdrawal
of 1% levy on jewellery.
ü 1%
TDS withdrawn on transfer of immovable property.
ü Long
term capital gains tax on PE investors cut to 10%.
