The government has earned Rs 98,000 crore from LTCG.
The government has earned more than Rs 98 billion in a year from the same tax, which has created a stir over the increase in capital gains tax. The Minister of State for Finance himself has given this information in Parliament. Recently, the government has increased LTCG on equity units and equity-oriented mutual funds in the budget. At the same time, the tax exemption has also been increased. After that, there is a lot of opposition to this decision among investors investing in the stock market. The special thing is that on the issue of abolishing this tax, the Finance Minister stated that there are no plans for it in the future. This means that those who invest in the stock market and mutual funds will have to pay more tax. Let us try to understand what kind of information the government has given in Parliament.
15 percent increase in profits
The government has collected Rs 98,681 crore from long-term capital gains tax on listed shares in 2022-23, up 15 per cent from last year. Minister of State for Finance Pankaj Chaudhary gave details of the long-term capital gains (LTCG) tax collection between the financial years 2018-19 and 2022-23 in the Rajya Sabha. Long-term capital gains on equity units and equity-oriented mutual funds were introduced from April 2018. These gains were taxed at 10 per cent, with exemption given to gains up to Rs 1 lakh per year.
How much did you earn
As per details shared in Parliament, Rs 98,681.34 crore was collected from LTCG in 2022-23, which is 15 per cent higher than the collection of Rs 86,075.49 crore in the financial year 2021-22. The collection in 2020-21 was around Rs 38,589 crore, in 2019-20 it was Rs 26,008 crore and in 2018-19 it was Rs 29,220 crore. Asked whether the government is considering abolishing LTCG tax on shares/mutual funds during 2024-25, Chaudhary said there is no such proposal.
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Tax increase in the budget.
In the Budget 2024-25 announced on July 23, the LTCG tax on stocks and equity-oriented mutual funds was increased from 10 per cent to 12.5 per cent. The exemption limit was also increased to Rs 1.25 lakh from the earlier Rs 1 lakh. Long-term capital gains are calculated when the holding period of the capital is more than 12 months. Following this decision, there was a major fall in the stock market. The government estimates that this could earn it more money in the coming days.
