INR Tumbles To New Record Lows As Markets Digest Union Budget

The Indian rupee declined 5 paise to hit an all-time low of 83.71 (provisional) against the US dollar on Tuesday after the government raised tax rates on capital gains in the FY25 Budget. Indian shares ended little changed on Tuesday after falling sharply early in the day as Finance Minister Nirmala Sitharaman proposed to increase Securities Transaction Tax (STT) and long-term capital gains (LTCG) taxes in her Budget speech. "It is proposed to increase the rates of STT on the sale of an option in securities from 0.0625 percent to 0.1 percent of the option premium, and on sale of a futures in securities from 0.0125 percent to 0.02 percent of the price at which such futures are traded," the FM said in a move that appears to aim at reining in rampant F&O trading. The long-term capital gains (LTCG) on all financial and non-financial assets will now attract a tax rate of 12.5 percent from 10 percent earlier. Short-term gains on certain financial assets shall henceforth attract a tax ..