Income Tax junks reports claiming plans to overhaul capital gains tax laws

There is no such proposal, the I-T dept said.

The Income Tax Department of the Government of India has junked media reports suggesting plans to overhaul the existing direct tax system and said that “there is no such proposal”.

Sharing an excerpt of a report claiming that “India is preparing an overhaul of its direct tax laws to replace a complicated matrix of rules”, the I-T department wrote on Twitter: “It is clarified that there is no such proposal before the Government on capital gains tax.”

It is clarified that there is no such proposal before the Government on capital gains tax.@nsitharamanoffc@officeofPCM@FinMinIndia@PIB_India https://t.co/jVP6Vs4bVT

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— Income Tax India (@IncomeTaxIndia) April 18, 2023

Earlier on April 18, a news report by Bloomberg said that the Centre was working to increase the capital gains taxes for top-income earners, citing sources.

The report stated: “At the heart of the rework is potential increases in capital gains taxes for top income earners, the people said, asking not to be identified as the details are private. For instance, while India levies a tax of as much as 30 percent on income, it taxes gains on certain asset classes such as equity funds and stocks at a lower rate.”

Terming such existing tax rules as “not progressive” the said report had quoted sources as saying that a panel may be appointed to build on proposals submitted to the Finance Ministry in 2019 with an eye to implementing it in 2024.

The report also said that with a new direct taxes code, the government is looking to “replace India’s complicated tax system with a simpler law to draw in companies looking to shift their operations out of China amid growing tensions between Washington and Beijing”.

Notably, the benchmark stock index had fallen as much as 0.6 percent in Mumbai after the report was published.