Long Term Capital Gains tax required in new situation: Jaitley

TIL Desk/Business/New Delhi/ Defending the ruling NDA’s management of the economy as compared to the previous UPA government’s record in this regard, Finance Minister Arun Jaitley on Thursday ruled out any rollback of the Long Term Capital Gains (LTCG) tax reimposed for the coming fiscal.

Presenting his last full budget before the general elections due in early 2019, Jaitley proposed to tax LTCG on equities exceeding Rs 1 lakh at 10 per cent, which is expected to bring in revenue of Rs 20,000 crore. “There was a time when LTCG was not imposed because we wanted to get money into the stock markets,” Jaitley said replying to the discussion on the budget in the Lok Sabha.

“That is no longer the situation. We did an assessment and found that the exempted income from Long Term Capital Gains last year amounted to Rs 3,67,000 crore,” he said in defence of the exchequer’s search for revenue at a time when he has announced a rise in the fiscal deficit targets for the current and the next year. “Only a fraction of this amount is accounted for by small investors.

Most of them are large corporates, high net worth individuals, foreign institutional investors and LLPs (limited liability partnerships),” he added. A day after the Union budget was presented in Parliament, Indian equity markets witnessed the steepest fall since November 2016 leading the Sensex to shed over 800 points and the Nifty50 over 200 points in a single day.