FPIs get covered by higher tax rate as they have been investing as a non-corporate entity such as trust or association of persons.
After swinging nearly 400 points during the day, Sensex settled 173.78 points or 0.45 per cent lower at 38,557.04.
In Delhi, gold of 99.9 per cent and 99.5 per cent purity held flat at Rs 34,870 per 10 gram and Rs 34,700 per 10 gram.
Rupee is trading at 68.67 against dollar amid unabated foreign fund outflows and rising crude oil prices.
After gyrating nearly 200 points, the 30-share index was trading 33.76 points, or 0.09 per cent, lower at 38,697.06.
Mumbai was the only market to record an increase with inventory overhang rising by 14 per cent.
Crisil sees mere 5-6 per cent rise in revenue.
Strengthening crude oil prices and a stronger greenback in global markets, however, kept the rupee rise in check.
After swinging 378 points during the day, the 30-share index settled 10.25 points or 0.03 per cent higher at 38,730.82.
Globally, spot gold was trading lower at USD 1,394.39 an ounce, while silver was down at USD 15.08 per ounce in New York.