Budget 2018: Finance Minister Arun Jaitley while presenting the union budget 2018-19 on Thursday, introduced 10 percent long term capital gains tax on profits made on equities exceeding Rs 1 lakh without allowing benefit of indexation. The gains made till January 31 will be grandfathered, Arun Jaitley added. He also informed the House that total exempted capital gains from listed shares and units is around Rs 3,67,000 crores as per returns filed for assessment year 2017-2018. He said that the major part of the gains made goes to the corporates and LLP thus creating a bias against other businesses including manufacturing. So, there arises a chance to make modest change in the present tax regime, he said. It is believed this step will assist the Finance Minister Arun Jaitley to raise more tax in Budget 2018.
After Budget 2018 will your income tax go up or down? Find out with this Income Tax calculator
However, the gains from equity shares which are held up to one year period will remain short term capital gain and will continue to attract rate of 15 percent. The Finance Minister also proposed to introduce tax on distributed income by equity oriented mutual funds at 10 percent. “Genuine investors should not be bothered on LTCG Tax.
Huge frauds related to income conversion to LTCG will moderate,” said market analyst Sandip Sabharwal.
WATCH- Brief History Of Budget: 10 Interesting Facts You Shouldn’t Miss
With the reforms and various incentives, the equities have become buyout, Arun Jaitley said, adding that the returns on equities is attractive even without exemption. Before budget 2018, it was widely said that an increase in the time limit for LTCG from 1 year to 3 years looks possible. However, with Finance Minister Arun Jaitley disn’t come up with such a change. The markets tanked 463 points post budget. Finance Minister Arun Jaitley hasn’t made any changes in the personal income tax structure as well.