The government on Tuesday said it has not taken any decision on the representations demanding withdrawal of long-term capital gain (LTCG) tax reintroduced in Budget 2018. In a written reply to the Rajya Sabha, minister of state for finance Shiv Pratap Shukla said: “Representations have been received requesting for withdrawal of the proposal to introduce tax on LTCG on listed securities through Finance Bill, 2018.”
Finance minister Arun Jaitley in his budget proposals reintroduced 10 per cent LTCG tax on profits made on equities exceeding Rs 1 lakh without allowing the benefit of indexation.
The gains made until January 31 was grand-fathered.
“The decision will be reflected in the official amendment, if any, to the Finance Bill 2018, at the time of consideration and passing by Parliament,” Shukla said while answering the question whether the government is considering to reduce LTCG tax.
The question was asked by DMK member Kanimozhi in the “light of falling stock market in India.” The re-introduction of the long term capital gains tax had spooked the stock market.
Many stakeholders have been demanding its withdrawal. The government has so far declined any rethink on the LTCG proposal. While the government strongly advocated reintroduction of LTCG tax, PMEAC member Surjit Bhalla last month had said that it was leading to a negative sentiment in the stock market.
He had said the long term capital gains tax on equities did not fit the revenue maximisation bill and the tax revenues were way outlandish.