Stock market investors are in for some good news! This announcement can be made in the budget.
If you are also making money in the stock market, then this news may come in handy for you. In fact, next week on July 23, Finance Minister Nirmala Sitharaman will present the first full-fledged Modi Budget 3.0. In such a situation, this budget may bring good news for stock market investors. It is speculated that big announcements may be made in the budget to provide relief on capital gains tax.
There may be a big announcement.
According to the Economic Times report, in the case of capital gains tax, there is a lot of confusion among investors regarding the category of the asset and the holding period of the same. The government understands this problem of investors and may announce measures in the budget to overcome it. If the government considers simplifying and providing relief on capital gains tax, it may benefit investors of various assets including equity investors.
You can find this gift in the budget.
In the year 2018, the then Finance Minister Arun Jaitley had imposed long-term capital gains tax at the rate of 10 per cent on profits over Rs 1 lakh and removed the indexation benefit. Analysts are hoping that the indexation benefits may be reintroduced in the budget. Apart from this, there is also a demand to increase the limit for imposing tax on long-term capital gains from Rs 1 lakh to Rs 3 lakh. This can prove to be a profitable deal for stock market investors, especially those who invest money in mutual funds.
These are the rules for capital gains tax on shares
Under current rules, if a listed share is held for less than a year, capital gains tax is payable at the rate of 15 per cent. This is called short-term capital gains tax. This means that if an investor sells a listed share within a year of its purchase, short-term capital gains tax is payable at the rate of 15 per cent on the profit made on it. If the period is more than a year and the profit is more than Rs 1 lakh, long-term capital gains tax is payable at the rate of 10 per cent.
The category varies by asset class.
Taxpayers have to pay capital gains tax on investments in various asset classes. If you invest directly in stocks, you will have to pay capital gains tax. Apart from this, capital gains tax is also applicable on investment in stocks or debt through mutual funds. At the same time, capital gains tax is also payable on asset classes such as gold, silver, and property. However, the applicable capital gains tax category, its duration, and its limits vary depending on the asset class.
