Modi Cabinet’s big bet: Income tax on government bonds abolished, foreign investors own silver, who will benefit?

New Income Tax Relief: A very big and historic decision has been taken for foreign portfolio investors in the important cabinet meeting chaired by Prime Minister Narendra Modi. The government has approved major changes in the Income Tax Act to mitigate the adverse effects of the Iran war on the economy. Under this decision, now foreign investors will not have to pay any tax on the earnings from Indian government bonds. As soon as the final approval of the President is received, this special ordinance will be fully implemented across the country.

The main objective of this important decision is to further increase foreign capital in the country and strengthen the Indian market. Experts believe that this step will rapidly attract foreign investors towards Indian securities in large numbers. Apart from this, today the price of gold in the Indian market has reached Rs 15527 per gram and the price of silver has reached Rs 262.44 per gram. With these new economic changes, investors in the stock market and bullion market have full hope of getting better returns in the future.

promote foreign investment

Under this new decision of the government, capital gains tax will be abolished on investments made by foreign portfolio investors in Indian government securities. According to the current system, foreign investors have to pay heavy tax on bonds held for more than 12 months. Now they will not have to pay long term capital gains tax of 12.5% ​​on listed shares and government bonds. This new tax exemption will quickly attract a large number of foreign investors and their funds to the country.

changes in tax rules

Earlier, foreign investors also had to pay a separate withholding tax of 20% on the interest received from government bonds. The concessional rate of 5% on this heavy withholding tax was abolished by the government in the year 2023. Due to this decision, the financial burden of tax on foreign portfolio investors had increased significantly. Now with the implementation of this new provision and special ordinance, foreign investors will get a huge and important economic relief.

This huge discount given to foreign investors will do a great job in providing a new and strong direction to the Indian stock market. Amidst the Iran war and increasing tension in the international market, this decision is going to provide a huge support to the economy. These new and historic economic reforms are also likely to bring huge amount of foreign direct investment into the country. The government is continuously trying to make the country’s economy the strongest and best in the world through its policies.

Also read: Petrol becomes cheaper in neighboring countries: Prices reduced in China, Pakistan and Nepal; When will there be relief in India?

Experts clearly believe that this important step will bring new shine and immense energy to the Indian market. With the increase in inflow of foreign funds, the position of the rupee will become much stronger and stable in the international market. This great decision will prove to be a great milestone in winning the confidence of investors and maintaining liquidity in the market. In the coming days, all small and big investors of the stock market will easily get direct and positive benefits of this big decision.