logo
 
As stock prices continued to take a beating, the government today gave detailed reasons for taxing long-term capital gains made out of selling shares, saying exempting such income from tax was inherently biased against manufacturing and encouraged diversion of investment to financial assets.

In Frequently Asked Questions (FAQs), it said the Budget for 2018-19 provides for taxing Rs 1 lakh and above of LongTerm Capital Gains arising from sale of shares held for over one year at a concessional rate of 10 per cent.

Prior to this, long-term capital gains arising from transfer of long term capital assets, being equity shares of a company or a unit of equity oriented fund or a unit of



business trust, was exempt from income-tax under clause (38) of section 10 of the Act.

However, transactions in such long-term capital assets are liable to securities transaction tax (STT)."This regime is inherently biased against manufacturing and has encouraged diversion of investment to financial assets.

"It has also led to significant erosion in the tax base resulting in revenue loss. The problem has been further compounded by abusive use of tax arbitrage opportunities created by these exemptions," the FAQs stated.

The exemption has now been withdrawn to minimise economic distortions and curb erosion of tax base, it added.


No Comments For This Post, Be first to write a Comment.
Leave a Comment
Name:
Email:
Comment:
Enter the code shown:


Can't read the image? click here to refresh
etemaad live tv watch now

Todays Epaper

English Weekly

neerus indian ethnic wear
Latest Urdu News

Which Women's cricket team will win the T20 World Cup 2024?

India
Australia
England