Random tinkering with capital gains tax could be a dampener for market: Buoyant's Jigar Mistry

Capital gains tax was introduced in the 2018 Budget

Changes to the capital gains tax structure could hurt investor sentiment, Jigar Mistry, Co-founder of Buoyant Capital said in an exclusive interaction with Moneycontrol.

Mistry also added that markets appreciate stability over random tinkering. If a scenario is presented where specific events are eliminated and a comprehensive package is created, detailing final rates and aligning debentures, unlisted equity, and listed equity, it would be a net positive compared to the current 10 percent.

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Capital gains tax was introduced in the 2018 Budget. Currently, equity holdings (either shares or units of equity-oriented mutual funds) sold within one year incur a short-term capital gains tax (SCGT) of 15 percent, while those sold after one year incur a long-term capital gains tax (LTCG) of 10 percent on gains exceeding Rs 1 lakh in a year.

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There is a general expectation that capital gains tax rules should be simplified across different asset classes, potentially starting with tweaks in the 2024 Budget. Additionally, there is an expectation for moderated taxation of derivatives and clarity on the taxation of Category 3 AIFs, especially long-only funds.

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