To assuage market fears, Finance Minister Arun Jaitley on Sunday said there is no move to impose long-term capital gains tax on share transactions, an issue investors are hugely touchy about. The statement came a day after Prime Minister Narendra Modi reportedly dropped a hint on increasing taxes on capital markets and the need for all sections, including market players, to contribute to the national exchequer.
If the government tinkers with long-term capital gains, it is bad public policy to keep changing it. Second, a lot of people who benefit from it are promoters who hold the shares for a long period, and they will be hit, he said.
He emphasised that the STT is a more equitable method to collect taxes.
Let’s abolish the STT if the long-term capital gains are the way to go, he said.
It is a low-volume downtrend in markets and it might continue into new year, he said. But he is not bearish, and these things happen in the market.
Speaking to Dinesh Kanabar, CEO of Dhruva Advisors, said that there has been an assurance from the FM that there will be a commitment that will move to a reduced rate of taxes.
He believes that that government won’t increase the STT as it is across the board. “I am seeing a rationalisation of taxes in the Budget.”
He also spoke about the GST rollout saying that he sees a continuing bridge between Centre and states. I commend the FM for everything he has done for keeping the dialogue going.
He expects a reduction in corporate taxes as most of the concessions are going away from this year.
Transcript to follow…