Foreign investors get major capital gains tax relief from the government

Key points

• In a major step aimed at attracting foreign investment, the government has decided to remove capital gains tax on foreign investors investing in Indian government bonds.
• Sources told India Today that the proposal was cleared by the Union Cabinet on Wednesday as part of a broader effort to boost capital inflows, support the rupee and cushion the economy from the impact of the ongoing Iran conflict and high crude oil prices.
• The Cabinet has also approved an ordinance to amend the Income Tax Act to implement the changes.
• The decision will come into effect after receiving the President's assent.
• The move comes at a time when India is grappling with record foreign investor outflows, pressure on the rupee and rising energy costs triggered by the prolonged conflict in West Asia.