Rupee Closes At Fresh Record Low As Budget Proposes Higher Capital Gains Tax

The Indian rupee weakened to a fresh record low against the US dollar on Tuesday after the government proposed a higher capital gain tax.

The tax on short-term capital gains is raised to 20%, while the tax on long-term capital gains is raised to 12.5%, Finance Minister Nirmala Sitharaman said while presenting the Union budget 2024.

The local currency weakened 3 paise to close at a record low of Rs 83.69 against the US dollar, after opening at Rs 83.64 on Tuesday. It closed at a record low of Rs 83.67 on Monday.

"As proposals for long-term capital gain and short-term capital gain were revealed, the stock markets fell and the rupee depreciated to a low of Rs 83.68, where the RBI seems to be holding the currency pair," said the head of treasury and executive director at Finrex Treasury Advisors LLP.