* NSE index closes up 1.63%, BSE index ends 1.74% higher
* ET Now says govt may remove FPI surcharge, LTCG tax
* Nifty auto index posts best day in 11 weeks
BENGALURU, Aug 8 (Reuters) - Indian shares rallied in late trading on Thursday and posted their biggest gain in 11 weeks, after reports that the government was planning sops for investors, including a withdrawal of the surcharge on foreign portfolio investors (FPIs) and a re-look at the capital gains tax.
The broader NSE index ended 1.63% higher at 11,032.45, while the benchmark BSE index closed up 1.74% at 37,327.36. Both indexes logged their biggest single-day gain since March 23.
Television channel ET Now reported here that the government might withdraw the FPI surcharge through a notification or ordinance, and that it was working on a confidence-booster package for investors that included a re-thinking on the long-term capital gains tax.
Autos and state-run banks led gains, with the Nifty auto index ending 3% higher, its best in over 11 weeks, and the public sector banks index closing up 1.73%.
HCL Technologies was the top gainer among the NSE stocks, ending up 6.7%, while Tata Steel was the biggest laggard with a drop of 4%. (Reporting by Derek Francis in Bengaluru; Editing by Subhranshu Sahu)