Centre won’t abolish LTCG Tax on mutual funds, equities: Report
The union government was reportedly asked in Parliament if it would increase LTCG on mutual funds and equities and abolish the LTCG tax to help accelerate economic recovery from the aftermath of the coronavirus pandemic outbreak.
December 07, 2021 / 05:30 PM IST
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The Prime Minister Narendra Modi-led Bharatiya Janata Party (BJP) government at the Centre has no plan to abolish the long term capital gains (LTCG) tax on equities and mutual funds, the Finance Ministry told Parliament on December 7.
Responding to a question raised in the House, the union ministry said it is not planning to increase the LTCG period from one year to two years for mutual funds or equities either, reported the Mint.
The union government was reportedly asked if it would increase LTCG on mutual funds and equities and abolish the LTCG tax to help accelerate economic recovery from the aftermath of the coronavirus pandemic outbreak. To this, the Union Ministry of Finance responded saying: “There is no such proposal under consideration.”
Notably, the long term capital gains on the sale of equity was made taxable w.e.f. April 2018. Prior to that, LTCG on equity investing used to be tax-free in India.
The Centre earned Rs 1,222 crore from LTCG in 2018-19 and Rs 3,460 crore and Rs 5,311 crore in the assessment years 2019-20 and 2020-21, respectively.
Equity investments also attract a short-term capital gains tax, which has a flat rate of 15 percent irrespective of the income tax slab and is applicable to the sale of equity shares within 12 months.