India needs an ideal tax framework: BSE‘s Ashish Chauhan

Country's oldest exchange, BSE is taking strict action to stem the misuse of capital market transactions after Securities & Exchange Board of India's (SEBI) crack down on companies using exchanges for evading taxes. In a chat with CNBC-TV18's Ritu Singh, MD & CEO Ashish Chauhan says an ideal tax framework must be worked upon now to prevent further misuse.He said: “There are various tax exemptions that are available. Eight-ten years back a new tax was introduced called securities transaction tax (STT) in lieu of the long-term capital gains tax for the equities and that has created a large tax arbitrage, which basically is there for all stocks.” “Recently Sebi has cracked down heavily on misuse of stock market facilities for tax avoidance using this long-term capital gains tax route. So it is better to close this route and ensure that there is no tax arbitrage available and people don’t misuse the stock market systems,” he added.Q: The markets have recently seen a lot of volatility because of external factors in Greece and China, how long do you see this continuing and what is the impact that India may have in the long-term?When asked about market volatility, he said volatility is here to stay for the entire world because of what has happened in 2007-2008. He is also hopeful of smart money flowing into India in the next five years.