New Delhi: Finance Minister P Chidambaram today (Jul 12, 2004) promised to have a "relook" at the Transaction Tax rate of 0.15 per cent and sought industry's support to liberalise FDI (Foreign Direct Investment) regime, which has been opposed to by Left parties.

"We must admit that Transaction Tax is efficient, neat, non-regressionary, eliminates tax avoidance and everybody contributes to the Exchequer... But I am prepared to relook at the numbers," he told a FICCI post-Budget meeting.

"We made a judgment that the complex capital gains tax regime was distorting the market and encouraging tax avoidance. The Transaction Tax would be beneficial in the long run," he said, a day ahead of his meeting with brokers, who were opposed to the new tax, particularly on bonds, which have low margins.

After consultation with brokers, some of whom were even in favour of it, Chidambaram said he had fixed three rates zero per cent for long-term capital gains tax, 10 per cent for short-term capital gains tax and 0.15 per cent transaction tax on purchase of listed securities. "The numbers could be zero, 10 and 0.15 or zero, 15 and 0.10 per cent," he said, adding he would seek support from everybody for the long-term benefit of the capital market.

Without referring to Left parties' opposition to hike in FDI limit in telecom, civil aviation and insurance, he said that the Budget has tried to send clear signals to the world that India was on the path of reforms by raising the FDI limits.

"I appeal to industry to support the measures. Please explain it in purely financial, business, accounting and company law terms and not in ideological terms," he said.