Swiggy’s Anticipated IPO: A $15 Billion Valuation in the Making
Govt looks to tweak capital gains tax rules. All you want to know
![money money](https://storage.googleapis.com/5paisa-prod-storage/files/2022-11/Money%203_0.jpg)
![resr resr](https://storage.googleapis.com/5paisa-prod-storage/files/2022-01/author.png)
Last Updated: 10th December 2022 - 12:33 pm
The government is set to simplify its capital gains tax regime, according to a news report.
The primary consideration will be parity within the assets, and the Centre may even consider changing the tax rates, a report in The Economic Times said. The multiple holding periods may also be rationalised.
According to the report, officials say that the capital gains tax regime is complex and that there is a case of simplifying and rationalising it.
What sort of changes in rules could be in the offing?
A task force had recommended changes in indexation benefit rules in 2019. It is expected to be the main basis of the review.
Under the current rules, equities and preference shares, equity-based mutual funds, zero coupon bonds and UTI units are considered long-term assets if held for over 12 months.
Debt-oriented mutual funds and jewellery are considered to be long-term assets if held over 36 months. On the other hand, real estate or immovable property is regarded as a long-term asset if held over 24 months.
As per the recommendation of a task force headed by Akhilesh Ranjan, a former Central Board of Direct Taxes (CBDT) member, the assets must be categorised into three classes, equity, non-equity financial assets and other property. It recommended that the indexation benefit must be given to all except equity. It is currently allowed on debt funds and real estate.
It further recommended a 10% capital gains tax on the sale of equity assets held for over 12 months. For equity held for less than 12 months, it asked for a 15% short-term capital gains tax.
However, for non-equity financial assets, long-term capital gains were recommended to be 20% if held over 24 months.
For other assets, it recommended a 20% tax with indexation on gains if held for over 36 months, ET added.
What are the current capital gains tax rules?
Under the current rules, long-term capital gains are taxed at 20%. In the case of equity, if the gain is more than Rs 1 lakh, a 10% tax is levied. However, a 15 per cent tax is charged in the short term.
Short-term capital gains are taxed on other assets after being clubbed with the income tax.
Trending on 5paisa
Discover more of what matters to you.
Indian Stock Market Related Articles
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.