After gyrating 1,052 points, the 30-share Sensex ended 792.96 points, or 2.16 per cent, higher at 37,494.12.
This has translated into a total net outflow of Rs 3,014.72 crore from the capital markets (both equity and debt).
The Centre on Friday had announced a slew of measures to boost the economy, including a rollback of enhanced super-rich tax on foreign and domestic equity investors imposed in the Budget.
The tax proposal, along with a lack of measures to boost the economy in the July 5 budget, led to foreigners withdrawing more than $3 billion from Indian shares.
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This message comes at a time when concerns are being raised over the increasing harassment of corporates by tax officials.
The FPIs are likely to raise issues such as the recently-introduced tax surcharge and seek either full rollback or suitably tweaked to keep them out of the higher tax net.
The carnage at the indices began since July 5, when the Budget proposed a levy of an additional surcharge on individuals and trusts earning more than Rs 2 crore and Rs 5 crore, respectively.
Foreign Portfolio Investors (FPI) can register themselves as companies to avoid the super-rich tax surcharge imposed in this year’s budget.
The government has maintained that it is not specifically targeting overseas investors and that the increase in surcharge applies to individuals and entities.
By raising taxes sharply, the Centre is giving little incentive to people with money to make new investment.