New Delhi: Government today (Jul 21, 2004) exempted bonds from the new transaction tax and reduced the levy on day traders and arbitrageurs from 0.15 per cent to 0.1 per cent.

Announcing the changes in the transaction tax in his reply to the discussion on the General Budget in the Lok Sabha, Finance Minister P Chidambaram said the 0.15 per cent Fixed Transaction Tax on all securities has now been replaced by differential rates.

He said those securities, which attract 0.15 per cent transaction tax will continue to be exempt from the Long Term Capital Gains tax and attract 10 per cent Short Term Capital Gains tax.

Enthused by the Finance Minister P Chidambaram's announcement on turnover tax, the sensex was quoted higher by 83 points at 5041.19 at 3.30 hrs (IST). The Nifty also rose by 31.55 points to 1597.65.