No logic in keeping high equity returns outside tax net: Hasmukh Adhia
Justifying the government’s decision to bring equities under the tax net by levying the Long Term Capital Gains (LTCG) tax, finance secretary Hasmukh Adhia said that there was no logic in not taxing high returns made from equities.
“It is not right to keep one class (stocks) completely out of the tax net. Equities are giving 14-15% returns every year, and so are mutual funds. If you keep reaping the benefits of 15% returns, there is no logic to keep you outside the tax net,” Adhia said while speaking at the “Post Budget Analysis and GST” at Indian Institute of Management Ahmedabad (IIMA) on Sunday.
Announcing the Budget for financial year 2018-19 on February 1, finance minister Arun Jaitley imposed 10% tax on LTCG made on equities. So far, profit made on stocks held for more than one year, were not taxed, while gains made on stocks held for less than a year were categorised as short term capital gains, and taxed at 15%.
Adhia said that when bank deposits which earn 7 or 8% returns were taxed, and salaried class paid up to 30% tax, 10% tax on those making huge returns from equities, was not a huge deal. He also said …read more