Live Market Updates: Sensex jumps 100 after FinMin clarifies on TRC; realty down

Moneycontrol Bureau

Key equity benchmarks recover after the finance ministry clarified on finance minister P Chidambaram's tax residency certificates announcement, which had created confusion among FIIs.

At 14.07 hrs IST, the Sensex is up 105.18 points or 0.56 percent at 18966.72, and the Nifty up 37.85 points or 0.66 percent at 5730.90.

The finance ministry said on Friday it will not question the validity of tax residency certificates (TRCs) held by foreign investors, while noting the current double-tax treaty with Mauritius remains in effect, pending continued talks.

“Nothing new has been done on tax residency certificate (TRC) for foreign investors that was not there last year; current treaty on double-tax avoidance with Mauritius holds pending talks,” the finance ministry statement says.

The clarification from the ministry comes after the government created confusion with a proposal on Thurday stating a tax residency certificate "shall be necessary but not a sufficient condition" to take advantage of double taxation avoidance agreements.

Meanwhile, shares in real estate developer DLF fall 4.8 percent amid weak sentiment and on fears that demand for premium housing may be hit after the 2013/14 budget introduced a 10 percent surcharge on taxpayers with annual income of more than Rs 10 million.

"The surcharge and less abatement in service tax will hurt the disposable income and affordability for premium housing," said an analyst tracking the sector.

Other premium housing developers also fall, with Oberoi Realty down 3.1 percent, Sobha Developers down 2.1 percent.