Centre likely to simplify capital gains tax structure in Budget: Official

Share with your friends

According to a senior official on Tuesday, the government will probably simplify the capital gains tax system to align the tax rates and holding period across the asset class in the upcoming Budget.

The representative described the current capital gains tax system as “complex.”

Listed shares are currently subject to a more lenient long-term capital gains tax (LTCG) than other assets, such as real estate, which requires taxpayers to keep these assets for longer periods of time in order to avoid paying higher short-term taxes.

“We need to reevaluate the rates and holding periods for the capital gains tax structure.” The official stated, “We would be open to changing the structure.” “We are reviewing the suggestions received from stakeholders,” was the statement.

For listed shares and debt securities, the holding period for long-term capital gains tax is more than 12 months; for unlisted shares and real estate, it is more than 24 months; and for debt mutual funds and securities, it is more than 36 months.

Analysts are optimistic that the tax reform will result in a reduction of the tax burden on gains from the sale of unlisted equity shares, units of real estate investment trusts, and possibly even debt funds.

Short-term gains are taxed at 15% (STCG) for both domestic and foreign investors, while long-term capital gains (LTCG) on listed shares are 10% on gains exceeding Rs 1 lakh without indexation benefit. While the STCG is paid at the applicable slab rate of the individual concerned, the LTCG is payable at a rate of 20% on unlisted shares for domestic investors and 10% for non-residents. Similar to how LTCG is 20% with an indexation benefit, STCG on debt funds is determined by the investor’s tax bracket.

When it comes to holding durations, stakeholders want listed and unlisted stocks to be equal. Additionally, there is the problem of unlisted shares having higher tax rates for short- and long-term capital gains than listed shares.

The government last made changes to the capital gains tax structure in the budget for fiscal year 2019 when it reinstated LTCG on listed shares. The increase in capital market activity over the past two years has brought in significant tax revenues for the government through the capital gains tax.


Share with your friends

Leave a Reply

Your email address will not be published.

Latest Press release

Runwal Group Makes A Big Foray Into Commercial Real Estate After Cementing Its Position in Residential and Retail Segments

Share with your friends

Share with your friendsMumbai, 30th March, 2023: Runwal Group, one of India’s top real estate developers, is a well-known name in residential and retail real estate business. With the iconic R City, R Mall and R Galleria in retail and numerous residential projects across MMR, the group has been a dominant name in the industry. After […]


Share with your friends
Read More
Latest Education

JEE Main 2023 Session 2 Admit Card to Be Out Soon: Verify the date and time.

Share with your friends

Share with your friendsThe Joint Entrance Examination (JEE) Main Session 2 admit card 2023 is anticipated to be released by the National Testing Agency (NTA) soon. The first week of April is predicted to see the release of the JEE Main admission card. The NTA has not yet provided an official confirmation. The official website […]


Share with your friends
Read More
Latest

The Wadhwa Group invites homebuyers of ‘Atmosphere 02’ to seek blessings of their new homes on Gudi Padwa

Share with your friends

Share with your friendsMumbai, March 29, 2023: The Wadhwa Group, one of India’s leading real estate development companies and a prominent realty player in Mumbai, has in a first, invited its home buyers on Gudi Padwa day to seek blessings and verify the work in progress of their new homes in the ongoing iconic project ‘Atmosphere […]


Share with your friends
Read More