But short term capital gains tax continues to be at 15 percent.
Bond yields hardened as well during the early trading hours of Friday expecting a hawkish stance from the Reserve Bank of India (RBI).They cooled off only after reports that the central bank will conduct open market operations and buybacks.
Meanwhile, it was a black Friday for the Indian stock markets, which witnessed a bloodbath as panic-stricken traders and investors dumped shares across the board rattled by the budget proposal to re-introduce long-term capital gains tax on equities amid profit-taking due to lofty valuations.More news: Du Plessis hits ton, takes SA to 269 for 8
The tax liability will accrue only when the income from sale of equity/ equity mutual funds is over Rs one lakh. Negative leads from Asian markets also spoiled sentiment. The BSE Midcap index fell 4% to 16,574.70, the most since August 2015. The tax will be applicable based on cost prices prevailing on 31st January 2018.
The major takeaways from the Budget were infrastructure boost, benefits to marginal farmers, extending corporate tax rate cut to Micro, Small & Medium Enterprises (MSME), and encouraging rural spending. The target for 2018-19 has been fixed at 3.3% as against the Fiscal Responsibility and Budget Management Act target of 3%.
"The fiscal policy continued on the path of consolidation, albeit at a slower pace than the previous projected path". While GDP growth at 6.3% in the second quarter of 2017-18 signalled turnaround of the economy, growth in the second half is likely to remain between 7.2% to 7.5%.
Globally, Asian stocks finished on a mixed note as rising bond yields and mixed earnings from top US companies helped induce some caution ahead of the closely-watched USA monthly jobs report for January, due later in the day. A rising gilt yield puts pressure on banks to hike their lending and deposit rates. The index gained over 4 percent in December.