Marketmen urge the Finance Minister to lower tax burden for investors
India’s Finance Minister Nirmala Sitharaman on Friday sent a clear message out to marketmen, economists and the media on possible easing relating to the long-term capital gains tax (LTCGT) or the alterations to the dividend distribution tax (DDT): That it is not going to happen anytime soon.
“Have I really got the opportunity to understand the impact of the LTCGT proposal?….not really. It was only introduced in about 2018,” Sitharaman responded to a query during an interaction in Mumbai. Several heads of financial services firms, once again, urged Sitharaman to rethink the possibility of easing the LTCGT for investors.
The gathering included well-known personalities such as Motilal Oswal, chairman and managing director of Motilal Oswal Financial Services; Soumya Kanti Ghosh, Group Chief Economic Advisor at State Bank of India; and Hemendra Kothari, chairman of DSP Investment Managers. They raised concerns relating to the missing pieces which the government might need to have a look at.
Currently the long-term capital gains (LTCG) on the sale of listed equity shares have been made taxable from 1 April 2018 at a rate of 10 percent on gains of over Rs 1 lakh in a financial year. Long-term means a holding period of more than one year from the date of purchase and these gains are the profits earned on the sale of listed equity shares.
Prior to 2018 was amended, the LTCG earned on the sale of equity shares was tax-free in the hands of investors.
Media persons also raised queries relating to the proposed disinvestment of Life Insurance Corporation (LIC), the dual personal income tax rate structure and tackling consumption concerns better. India’s economy is estimated to grow at the rate of just 5 percent in FY20.