With a view to boosting investor confidence on Dalal Street, the Finance Ministry is working on a package for capital markets, which may include withdrawal or some tweaking of the long-term capital gains tax (LTCG), ETNOW reported on Thursday, quoting government sources.
The report said the government is studying the possible impact of withdrawing LTCG after a three-year holding period. This means if you are investing in equities and holding them for three years, there will be no tax on the gains.
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“This will excite investors. A reduction in taxes at this point of time will definitely improve market sentiment,” Nilesh Shah, MD, Kotak AMC, told ETNOW.
Shah said the move would benefit long-term investors. “This is a message from the government that there is a respect for the market,” he said.
The government reintroduced the long-term capital gains (LTCG) on equities in Union Budget 2018 after 14 years, catching the markets by surprise. LTCG is levied at 10 per cent for all listed equity shares on gains above Rs 1,00,000. It has seen given the market enough heartache.
Source: Economic Times
