NEW DELHI: The government on Tuesday denied reports of overhauling the capital gains tax laws to bridge inequality of income in India. “It is clarified that there is no such proposal before the government on capital gains tax,” the Income Tax department tweeted after the international news agency said that the Centre is mulling raising capital gains tax to reduce the gap in incomes in the country.
According to the report, the government may appoint a panel to build on proposals submitted to the Ministry of Finance in 2019 with an eye to implement them in 2024, though no final decisions have been made. While the high-income slab is taxed at 30%, various asset classes like equity are taxed at lower rates.
After the Union Budget 2023-24 was presented, Finance Minister Nirmala Sitharaman told the media that it was too early to make changes in the capital gains tax law as the law was tweaked in 2018 only.
In the amendment made to Finance Bill 2023, the indexation benefit on long-term capital gains from debt mutual funds was removed.
From April 1, 2023, debt mutual funds are being taxed as per the income tax slabs of an individual’s income like in the case of fixed deposits. Earlier, long-term gains were taxed at 20% with an indexation benefit.
Earlier, finance ministry sources had told this newspaper that the government was keen on doing away with the indexation benefit in the budget itself, but it was not taken ahead as the long-term capital gains in equities were brought only five years ago and the government wanted people to adjust with the present system.