Free Press Journal

Budget 2018: Tax on Long-Term Capital Gain tempts to do short-term investments


budget 2018, Long-term Capital Gain, LTCG, Arun Jaitley, Finance Minister, Stock Market

Mumbai: As the fiscal year Budget- 2018 has been announced by the Finance Minister Arun Jaitley on Thursday the stock market small investors are unhappy with tax imposition on Long Term Capital Gain (LTCG). Rajiv Mehta a stock market investor of Bombay Stock Exchange (BSE) stated tax on LTCG will tempt them to do short-term investment.

Mehta elaborated on short-term investment investors has to pay 15 percent of the tax. While now as per new budget 2018 long-term investment will also have 10 percent of the tax. Therefore, the difference is only of 5 percent which is nominal. For example, instead of keeping shares for a long time which may give me a lesser price than the actual purchase rate, investors will sell them to avoid any risk.

While Siddharth Kuvavala, another stock market investor stated that he is a prudent investor and he developed his portfolio with much patience and time, therefore, it depends on investors horizon and strategy. “As an investor introduction of tax has definitely shocked me and I am not happy with the move. The data shows in last one year the liquidity in the market has increased tremendously. Hence, the government would have thought some other way to earn revenue. LTCG would not have been touched.”

He further stated instead of imposing tax government should have incentivised long-term investment.

Meanwhile, Ashish Kumar Chauhan, Managing Director & Chief Executive Officer (CEO), BSE applauded the budget. “The Finance Minister has rolled out an excellent budget with a thrust to core areas such as agriculture, healthcare, education infrastructure and rural development. The overall focus is to support farmers and rural areas, fine print focuses on boosting growth, jobs and private investment,” added Chauhan.