- Tax on long-term capital gains could be raised to finance welfare schemes
- The government is exploring ways to garner more tax revenue by tapping new sources or digging into existing ones
Finance minister Nirmala Sitharaman won’t cut the tax rate for large companies to 25% from 30% in the forthcoming budget and may raise the long-term capital gains tax, as the government grapples with a potential revenue shortfall and additional spending commitments.
The Narendra Modi administration is exploring ways to garner more tax revenue either by tapping new sources or by digging into existing ones, a person familiar with the discussions in the government said on condition of anonymity.
One of the ways being examined by officials is whether there is a scope to raise the tax on gains made when stocks that are held for more than a year are sold, said the person cited above. Such long-term capital gains exceeding ₹1 lakh are now taxed at 10%.
Modi, who returned to office for a second term last month with a massive mandate, has to find the resources to back the income support scheme for farmers and pensions for traders while forgoing revenue on relief promised to small taxpayers in the interim budget his previous government presented in February before going to the elections.
Source: Livemint
