In 2018 budget, Centre had reintroduced concessional 10 percent on LTCG tax exceeding Rs 1 lakh from sale of shares, subject to payment of Securities Transaction Tax at the time of acquiring the equities
According to a report by rating agency Icra, equity funds, including equity-linked saving schemes saw monthly net inflow of Rs 6,657 crore in March, down from Rs 16,268 crore infusion seen in February.
LTCG Tax is applicable only on equity-oriented mutual funds which hold more than 65% of assets in equities. There is no change in debt fund taxability.
"A 10 percent tax does not take away from any investment decision. A 10 percent vs 0 percent is nothing that bleeds my pocket. “I don’t see this as a technical ceiling,” said Dipen Sheth, Head-Institutional Research at HDFC Securities.
Effective 1 April 2018, long term capital gains arising from transfer of listed equity shares exceeding Rs. 1 lakh will be taxable at 10 percent
According to ANMI, the implementation of both STT and LTCG may lead to job losses with no major impact on government revenues.
There is no real gain from the grandfathering clause if stock itself crashes by a huge margin even if there are gains, which will be taxed at a later date and hence leaving investors with lower gains in hand
The Nifty50 slipped below its 100-days exponential moving average (DEMA) placed at 10,400. A fall below 10,200 could stretch the decline towards 10,000 levels which is closer to its 200-DEMA.
Finance Minister Arun Jaitley, in conversation with Network 18's Rahul Joshi, spoke about various schemes announced in the Budget 2018 including tax on long-term capital gains (LTCG).
Under the existing regime, long-term capital gains (LTCG) arising from the transfer of long-term capital assets, such as equity shares or unit of equity oriented fund or a unit of business trust, is exempt from Income-Tax.
Adhia attributed the fall to decline in global equity markets, which had a ripple effect in India
The Budget announced a 10 percent LTCG on stocks and equity-oriented mutual funds if the amount of gains exceeded Rs 1 lakh
In Frequently Asked Questions (FAQs), it said the Budget for 2018-19 provides for taxing Rs 1 lakh and above of Long- Term Capital Gains arising from sale of shares held for over one year at a concessional rate of 10 per cent.
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"With respect to the Capital markets, the budget was a definite disappointment. The Disinvestment target of Rs 80,000 crore for 2018-19 is conservative but again lacks boldness in divesting non-core assets," says Saurabh S Jain.
"Nominal GDP is expected to grow at 11.54 percent in FY19. A buoyant global trade environment and a stable (not appreciating) Rupee are key requirements. A good monsoon in 2018 will also help," says Deepak Jasani, Head – Retail Research at HDFC Securities.
A day after the government announced imposing 10 percent long-term capital gains tax (LTCG) in equity, the Sensex plummeted 840 points -- its biggest single-day slump since August 24, 2015.
As long as the total gain realised in the year of sale is more than Rs.1 lakh there would be LTCG implication even though the appreciation in each year is less than Rs 1 lakh
For stock market followers, most people have focused on the impact of the re-introduction of long term capital gains (LTCG) tax.
"Budget 2018 has widened the scope of the taxable presence of non-residents by moving from a ‘physical presence’ dominated nexus approach to a ‘significant economic presence’ nexus approach."
The 'grandfathering' clause is a special provision by which a person, institution or any entity can be exempted from a new law, rule or regulation.
More than long term capital gains (LTCG) tax of 10 percent that reintroduced in the Budget, introduction of a tax on distributed income by equity oriented mutual fund at the rate of 10 percent bothered investors much, experts suggest.
"This was an election year and a populist Budget was definitely on the anvil, especially after the recent fiasco in the Gujarat elections. The markets seem to be artificially held up, for now, wait and watch might be the best approach to adopt at this juncture," says Nikhil Kamath, Co-founder and Head of Trading, Zerodha.
With the introduction of LTCG tax and NIL tax on selling of equities till March 2018, investors are selling their holding to save 10 percent LTCG tax.
India market could see a bit of correction in the short term but the market has been correcting in the last one month even though Nifty rose in the same period.