India, June 5 -- The government on Friday promulgated an ordinance exempting capital gains tax on investments made by Foreign Institutional Investors (FIIs) in government securities, in a move aimed at boosting foreign capital inflows and strengthening India's debt markets. The decision comes amid ongoing global economic uncertainty linked to geopolitical tensions, including the continuing Iran conflict.

According to a PTI report, the Union Cabinet chaired by Prime Minister Narendra Modi had earlier approved the ordinance to amend the Income-tax Act, 2025, paving the way for tax relief on both interest income and capital gains earned by FIIs from government securities. The measure was formally notified through the Income-tax (Amendment) ...