New Delhi: Finance Minister Arun Jaitley on Saturday refuted media reports that the government could introduce long term capital gains tax in the upcoming Union Budget in February following Prime Minister Narendra Modi`s speech.
"The speech has been misinterpreted in some sections of the media which has started speculating that this is an indirect reference to the fact that there could be a long term capital gains on security transactions,” Arun Jaitley said.
“Now, this interpretation is absolutely erroneous. The Prime Minister has made no such statements directly or indirectly," Jaitley added.
Currently, long-term capital gains on the sale of listed securities are exempt from taxes. These are profits on sale of shares on a stock exchange platform after a holding period of one year or more.
He further said the Prime Minister has made no such statement directly or indirectly.
"Therefore, I wish to absolutely clarify that there is no occasion or opportunity for anybody to reach such a conclusion because this is not what the Prime Minister said nor is the intention of the government as has been reported in a section of the media itself," he said.
Yesterday, Modi had said "those who profit from financial markets must make a fair contribution to nation-building through taxes... We should consider methods for increasing it in a fair, efficient and transparent way".
"... Now it is time to re-think and come up with a good design which is simple and transparent, but also fair and progressive," Modi had said, adding that for various reasons, contribution of tax from those who make money on the markets has been low due to illegal activities and frauds or due to the structure of our tax laws that offer low or zero tax rate on certain types of financial income.
Profit gained from share transaction in less than one year is called short-term capital gains, which are taxed at a flat rate of 15 percent at present.
At the same time, all stock market transactions attract securities transaction tax (STT) in a range between 0.017 percent and 0.125 percent.
With PTI Inputs