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FinMin may review tax regime on long-term capital gains
The holding period is likely to be increased, in line with the tweaking that was done in the case of unlisted shares in the previous year’s Budget. In the case of unlisted companies, the Budget 2016-17 has reduced the period for getting benefit of long-term capital gain regime to 2 years from 3 years.
Gains from transactions in shares held for less than 12 months are considered short-term capital gains and are subject to 15 per cent tax.
Market experts say that any plan to impose tax on LTCG would make Indian equity market unattractive to global markets, since long-term gains on stocks sold after 12 months are tax exempt in most jurisdictions.
“Based on feedback from the market participants, there is a view in the government that a rejig in the holding period would be more palatable to global and domestic investors than imposition of capital gains tax,” said a government source.
The head of a leading financial firm also said that after the finance minister’s clarification, it is unlikely that the government will impose a capital gains tax for the long term. “We expect that the government will extend the holding period of equities to qualify for LTCG tax. It is also expected that the government may impose dividend tax on dividend income of less than Rs 10 lakh,” he said.
The review of the LTCG structure is being synchronised with the implementation of the General Anti Avoidance Rules (GAAR), which kick in from April 1. This will ensure that any changes in taxation structure of capital gains apply evenly to the domestic and global investors.
http://indianexpress.com/article/bu...rm-capital-gains-budget-arun-jaitley-4486959/
The holding period is likely to be increased, in line with the tweaking that was done in the case of unlisted shares in the previous year’s Budget. In the case of unlisted companies, the Budget 2016-17 has reduced the period for getting benefit of long-term capital gain regime to 2 years from 3 years.
Gains from transactions in shares held for less than 12 months are considered short-term capital gains and are subject to 15 per cent tax.
Market experts say that any plan to impose tax on LTCG would make Indian equity market unattractive to global markets, since long-term gains on stocks sold after 12 months are tax exempt in most jurisdictions.
“Based on feedback from the market participants, there is a view in the government that a rejig in the holding period would be more palatable to global and domestic investors than imposition of capital gains tax,” said a government source.
The head of a leading financial firm also said that after the finance minister’s clarification, it is unlikely that the government will impose a capital gains tax for the long term. “We expect that the government will extend the holding period of equities to qualify for LTCG tax. It is also expected that the government may impose dividend tax on dividend income of less than Rs 10 lakh,” he said.
The review of the LTCG structure is being synchronised with the implementation of the General Anti Avoidance Rules (GAAR), which kick in from April 1. This will ensure that any changes in taxation structure of capital gains apply evenly to the domestic and global investors.
http://indianexpress.com/article/bu...rm-capital-gains-budget-arun-jaitley-4486959/
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