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The Union Budget 2008 was present in Parliament by the Finance Minster, Mr P Chidambaram on February 29, 2008. The expectations of the financial services industry were wide sweeping. Budget 2008 proposes relatively limited changes in the taxing framework for the financial services industry. The key changes include an increase in the tax rate for short term capital gains realized on transfer of specified securities as well as rationalization of the law relating to securities transaction tax. There is reaffirmation of the intent to develop a deep and liquid corporate bond market. Two key areas where industry participants had hoped that the Budget would provide some clarity and relief, however, which were not addressed in the Budget, include the characterization of income from securities transactions as capital gains or business profits, and the taxation of SEBI registered venture capital funds.