Nirmala Sitharaman junks reports of income tax tweaks that made Sensex crash 1,100 points

Sensex plummets on Tax Department speculation:

Following speculation about potential changes by the Income Tax department after the Lok Sabha elections, the Sensex witnessed a sharp decline of 1,100 points.

Finance Minister Nirmala Sitharaman took to social media to debunk the rumors, labeling them as pure speculation. She highlighted that, "The Finance Ministry had not been consulted or informed about such proposed changes."

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According to the document:

The document said that, "When the new government starts working, the tax department might stop money from disappearing, change the rules about fines, and treat all kinds of assets the same." In India, we have different financial assets have different tax rules right now.

Clarification regarding news channel's tweet:

Sitharaman's response was triggered by a tweet from a news channel suggesting that the tax department intended to enforce uniform treatment across all asset classes.

The speculation centered on the idea that thoroughly around assuming office, the new government might initiate very important measures to prevent erosion of the tax base, overhaul penalty laws, and enforce uniform treatment for various asset classes.

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Market reaction and investor concerns:

Currently, India's tax structure varies across different financial assets. There is a very significant drop in Sensex points to the market's sensitivity to regulatory and policy changes, and especially regarding taxation as well.

Investors may have reacted strongly due to uncertainties surrounding potential alterations in tax laws and their implications for investment strategies.

We recommend investors to approach with experts before investing in any companies.