<h1>Foreign Institutional Investors Face New Tax Rules on Long-Term Capital Gains with Section 10(38) Exemption Removal. Effective April 2019.</h1> The taxation of long-term capital gains for Foreign Institutional Investors (FIIs) is set to change following the proposal to withdraw the exemption under clause (38) of section 10 of the Income Tax Act. Currently, FIIs are taxed at 10% on long-term capital gains from certain securities, but gains from equity shares, equity-oriented funds, or business trusts are exempt. With the proposed changes, these gains will be taxable if they exceed one lakh rupees, aligning FIIs with domestic investors. The amendment to section 115AD will be effective from April 1, 2019, applicable for the assessment year 2019-20 onwards.