In an almost 10-fold increase in tax collections from stock markets, the government is expecting to collect Rs 60,000-80,000 crore this financial year as a tax on capital gains in the stock markets as against Rs 6,000-8,000 crore in the previous fiscal.
- Under the Income Tax Act, gains from the sale of capital assets, both movable and immovable, are subject to ‘capital gains tax’. Movable personal assets such as cars, apparel, furniture are excluded from this tax.
- In the Budget for 2018-19, the government had introduced a tax for long term capital gains exceeding Rs 1 lakh at the rate of 10 per cent without allowing the benefit of any indexation but grandfathered gains till January 31, 2018.
- Equity shares or units of equity-oriented mutual funds held for more than 12 months are considered long-term, while house property held for 24 months is considered a long-term capital asset.
- Short-term capital gains are chargeable to tax at normal slab rates applicable to the taxpayer, except where such gain is arising from the sale of equity shares in a company or units of equity-oriented mutual fund or unit of a business trust, which attracts a tax of 15 per cent, while long-term capital gains in excess of Rs 1 lakh for equity is taxed at 10 per cent.
- The Budget for 2022-23 has introduced a capping of surcharge at 15 per cent for long-term capital gains on all types of assets irrespective of the capital gain.