The government has clarified in a tweet that it has no plans to revamp Capital Gains Tax.
The government has no plan, as of now, to revamp the capital gains tax structure as reported in a section of media, Finance Ministry sources said on Tuesday.
In fact, it is quite premature to talk about the next budget when the current year's finance bill is still under discussion and yet to be passed, sources told ANI rubbishing the media report that claimed that the government may revamp the capital gains tax structure in the next budget.
Finance Ministry sources said that as of now there is no such proposal and the media report is in the realm of speculation.
In India, long-term capital gains on listed equities held for more than a year is taxed at 10 percent on the portion of such gain above a threshold of Rs 1 lakh. This provision was introduced with effect from 1 April 2019.
The capital gains tax regime prescribes the holding period for determining whether the gain made when selling the asset is short-term or long-term.
The short-term capital gain on listed equities held for less than a year is taxed at 15 per cent in the case of listed shares and the applicable tax slab if it is unlisted.
Revenue Secretary said govt open to 'some tinkering' in varied rates
Last month, the Revenue Secretary Tarun Bajaj had said, the government is open to 'some tinkering' in the varied rates and holding period for computation of capital gains tax on shares, debt and immovable property, in a bid to make it simple.
Under the Income Tax Act, gains from sale of capital assets, both movable and immovable, are subject to 'capital gains tax'.
The Act, however, excludes movable personal assets such as cars, apparels, furniture from this tax.
Capital gains tax structure 'too complicated'
Bajaj added that the current capital gains tax structure is ''too complicated'' in terms of varied rates and period of holding across the assets and hence needs a relook.
''We need to rework the capital gains structure for rates, holding period… We would be open to some tinkering in it the next time we get an opportunity,'' Bajaj said at a CII event.
Asking the industry chamber to also conduct a study on what are the prevailing rates of capital gains tax across the world, Bajaj said, the department has already studied the rates in other nations like India and the developed world.
(With ANI inputs)
