Centre Likely To Simplify Capital Gains Tax Regime: Report

The central government could make changes to the current capital tax regime to simplify the system. This may include rationalisation of multiple holding periods and bringing parity within asset classes, reported The Economic Times quoting officials..Capital gains tax is levied by the government on profits arising from the transfer of a capital asset after holding it for a certain period. A capital asset can be any property, land, security, or stock. When such a capital asset is held for less than 36 months from the date of acquisition, then the asset is treated as a short-term capital asset. If the capital asset is held for over a period of 36 months, then it is considered a long-term capital asset. However, the period of holding can vary for different classes of assets. For instance, in the case of immovable property such as land or buildings and unlisted shares of a company, the period of holding is 24 months instead of 36..For other assets, including shares that are listed in a recognised stock exchange in India, units of equity-oriented mutual funds, and listed securities like debentures and Zero Coupon Bonds, the period of holding is 12 months..Now, with the anticipated changes in the capital gains tax system, the government is aiming to bring uniformity to the holding periods for different assets. Besides this, the tax rates could also be changed, the report added..A government official familiar with the matter was quoted as saying that the current capital tax regime is complex and that "there is a case for simplifying and rationalising it". The official added that the exercise may start with the direct tax task force report of 2019. The final decision on the changes in the tax regime will be taken to the highest political level closer to the budget, the official informed..Currently, the tax rate for long-term capital gains is 20%. The LTCG tax rate is 10% in cases where the gains arising from the sale of securities are more than Rs 1 lakh in a financial year.

Centre Likely To Simplify Capital Gains Tax Regime: Report

NDTV Profit

NDTV Profit

Follow Us

DISCOVER US FASTER

DOWNLOAD THE APP