Big news for stock market investors, preparation to replace capital gains tax, tax burden may increase
The government says that in other countries the long term capital gains tax is between 25-30 percent. Long term capital gains tax in our country is 10 percent.
Tax is levied on the basis of holding period.
Capital Gain Tax ,Capital gain taxMinistry of Finance of the news going on in the media about the change in (finance ministry) has denied. The Finance Ministry said that at present there is no plan to change the structure of capital gains tax. It is being claimed in some media reports that preparations are on to change the capital gains tax. It is completely baseless. In a report published in Mint, it was said that in the next budget, the government revenue collection (Revenue collectionsCapital gains tax can be changed to increase it. The Finance Ministry is considering this issue.
It has been said in this report that earnings from the stock market are like passive income. In such a situation, the tax rate on the earnings of the stock market should not be less than the tax on business income. There are many risks involved in business income, along with it also gives employment opportunities. Apart from this, the government is considering several welfare schemes, due to which there is a need to generate additional revenue.
There is no move to revamp the capital gains tax structure as of now, as alleged in some media reports. Any such reports are in the realm of speculation: Finance Ministry sources pic.twitter.com/b8eCw0wzdd
— ANI (@ANI) March 15, 2022
The source said that in order to bring any change in capital gains tax, the government will have to amend the law. The budget session is the best time for this. Till then the Finance Ministry will also seriously consider this issue. Talking about capital gains tax, it is of two types. First long term capital gain (Long Term Capital Gain Tax) and second short term capital gain (Short Term Capital Gain Tax).
LTCG is applicable on holding more than 1 year
If you invest in the stock market in your country for more than 1 year, then it comes under the purview of Long Term Capital Gain on investment. Long term capital gains tax is 10%. Long term gain up to 1 lakh is tax free. This rule is applicable from 1st April 2019. If you invest for less than 12 months, it is called short term capital gain. Short term capital gains tax is 15%. Thus, capital gains are taxed on the basis of the holding period.
Know what the Revenue Secretary had to say
Talking to industry people on February 9 after presenting Budget 2022, Revenue Secretary Tarun Bajaj had said that the structure of capital gains tax in our country is very complicated. It needs to be considered. On February 28, he again said that the annual income of people who get 80 percent capital gains from the stock market is more than 50 lakhs.
Capital gains tax up to 30% in other countries
The government says that in other countries the long term capital gains tax is between 25-30 percent. If the government increases the capital gains tax, then the sentiment of the investors will be adversely affected. In such a situation, big investors can shift towards real estate.
read this also, BharatPe launches gold loan service for shopkeepers, loan up to Rs 20 lakh will be available in 30 minutes
read this also, Rupee may slip to 77.5 levels due to Ukraine crisis, growth may decline to 7.1%