India, June 6 -- The Modi Government on Friday exempted foreign investors from income tax on interest earnings and capital gains from Government securities as it looked to attract foreign capital to counteract pressure on the rupee.

The Government promulgated an ordinance to amend the Income Tax Act to provide tax exemptions on interest income and capital gains arising from sale, exchange or transfer of Government securities, effective from April 1, according to a gazette notification dated June 5.

The exemption would be applicable with effect from April 1, that is, the exemption would apply to any interest or capital gains arising to FPIs on or after April 1 in respect of investments in G-Secs, the Finance Ministry said in a statement....