The rupee extended the morning gains and rallied 66 paise to 70.68 against the US dollar on Friday after Finance Minister Nirmala Sitharaman announced several measures to promote investment and growth.
In a major relief to foreign portfolio investors, FM Nirmala Sitharaman said Super-rich tax will not apply on capital gains arising from the sale of any security including derivatives in hands of FPIs.
The government on Friday also slashed effective corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies.
Following the announcements, the rupee which opened at 71.19 at the interbank foreign exchange, gained ground and touched a high of 70.68, registering a rise of 66 paise over its previous close.
The rupee had settled at 71.34 against the US dollar on Thursday. The rupee, however, could not hold on to the gains and was trading at 70.91 against the US dollar at 1134 hrs.
The government has also decided to not levy enhanced surcharge introduced in Budget on capital gain arising from the sale of equity shares in a company liable for securities transaction tax (STT).
Domestic equity benchmark BSE Sensex skyrocketed over 1300 points or 3.68 per cent, to 37,420.12 at 1120 hours, while the broader Nifty rose 362.95 points, or 3.39 per cent, to 11,067.75.
Brent crude futures, the global oil benchmark, rose 0.43 per cent to trade at USD 64.68 per barrel. The 10-year government bond yield was at 6.79 per cent in morning trade. The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.03 per cent to 98.23.
Sitharaman expressed confidence that the tax concessions will bring investments in Make in India, boost employment and economic activity, leading to more revenue.