New Delhi: Government is likely to announce changes in the rates of Transaction Tax and Capital Gains Tax following opposition by brokers and investors on the new tax on purchase of all listed securities.

"My entire revenue collection target is not based on Transaction Tax. It is less than one per cent of the total receipts. I will consider them," Finance Minister P Chidambaram said at a CNBC investor camp today (Jul 17, 2004).

The Government expects to mop up about Rs 4,000-5,000 crore from the new tax.

Chidambaram has already said he will clarify on 0.15 per cent Transaction Tax during his reply to Budget discussion in the Lok Sabha on Monday. To a query whether he will consider changes in the rates as it affected a large number of day-traders and bond dealers, he said, "I had asked for three numbers (for long-term capital gains, short-term capital gains and transaction tax). You have given me three numbers. I will consider them."

Mutual funds, brokers and other market intermediaries have voiced concern over the transaction tax on purchase of all listed securities.

Mutual funds have demanded exemption of Government securities and bonds from the tax, while brokers asked the Finance Minister to spare day-traders and arbitrageurs.

Chidambaram had proposed abolition of long-term capital gains tax, reduction in short-term capital gains tax from 15 to 10 per cent and a new Transaction Tax in the Budget.