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Centre plans changes in capital gains tax in Budget 2023

BNE News Desk


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Centre plans changes in capital gains tax in Budget 2023.

The Indian Government is planning changes to its capital gains tax structure in the next budget. This is to bring parity among tax rates and holding periods for investments across equity, debt and immovable property.

According to media reports at present, asset classes are not taxed uniformly. They have different holding periods for levying capital gains tax, which needs to be aligned.

According to an official, the government has received several proposals from the industry to simplify the capital gains tax structure, and changes are expected in the Budget for 2023-24.

It is to be noted that India taxes investment gains based on a lock-in or holding period. Investments in equity or equity-linked mutual funds for more than one year are considered long-term, and attract a 10 percent tax on gains of more than 100,000 rupees. Investments in equity held up to one year are considered short-term and attract a 15 percent tax.

Investment in debt-oriented funds is considered long term if held for at least three years. On the other hand, immovable property such as land needs to be held for at least two years to be categorised as long-term, and gains are taxed at 20 percent. Investment in a property held for less than two years is considered short-term and taxed at the income tax rate applicable to an individual.

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BNE News Desk