Securities transaction tax rate may not go up

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The securities transaction tax (STT) rates are unlikely to be altered in the forthcoming Budget. Neither would the tax on long-term capital gains stage a comeback.

The Budget would, however, contain a host of measures that would embolden retail investors to enter both the primary and secondary markets. Mutual funds’ activity in the equity and debt markets would also be promoted through specific steps.

The department of economic affairs — that includes the capital market division — in the finance ministry has proposed that STT rates be unchanged. It has also voted against reintroduction of long-term capital gains tax, according to officials.

Despite the Left’s view to the contrary, the government reckons that any extra incidence of tax on the capital market could only drive away first-time investors in stock markets. Savings in financial assets need to be given a fillip, the officials said, adding that the increased savings capacity of Indians hardly reflected on the capital market, in terms of the number of retail investors.

KEEPING STREET IN GOOD HUMOUR

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