Another proposal that s tanked the sentiment is to tax export earnings progressively and bring them at par with domestic profits over five years, which will take its toll on the bottomline of tech companies that derive a chunk of their profits from exports. The exact impact of this, say analysts, will depend on specific double taxation avoidance agreements in force. That s not all. This will mean there will be no zero tax companies, a fact that dampened the high spirits further. The flow of savings to mutual funds is likely to slow down some are even fearing redemptions following the withdrawal of capital gains tax exemptions on investments in such funds.
Every dark cloud has a silver lining.
The hike in the limit on portfolio investments by FIIs from 30 to 40 per cent is being seen as one of the few aces the FM has pulled out of his sleeve. The rationalisation of excise and customs duties may also pep up corporate performance in the long-term. That s two few, too late. Traders say tomorrow is another day. And not long after they ve logged out of BSE, they re already keeping a close eye on the Nasdaq.