The Sensex closed the day down 308 points at 17052 points, while the NSE lost 94 points, to close at 5184 points.
It may be recalled that Union Budget 2012-13 had provided for GAAR, following the Vodafone Supreme Court verdict in favour of Vodafone. FIIs sold heavily today on fears that the Union Government may raise tax demands as a result of these provisions.
It is now believed that P-Notes through which billions of dollars flows into stocks will now be taxed. Among the shares that lost ground today were IDFC, Sesa Goa, ICICI Bank, Sterlite Industries and Tata Power amongst others.
Mumbai based real estate companies saw heavy selling following the government's decision to hike stamp duties.
Among the few shares that gained ground today were Jaiprakash industries, Kotak Mahindra, Dr Reddy's Laboratories and ITC. Markets are now eyeing an exact clarification on GAAR, before making a decisive move on either side.