The Union Finance Ministry on Tuesday denied having any discussions around revising capital gains tax. Sources in the ministry said that media reports about changes in India's capital tax system were 'baseless', ET Now reported.
Earlier in the day, Bloomberg had reported that the central government is considering an increase in capital gains taxes for top income earners in a bid to reduce inequality in the country. Such changes would take place if the Modi government retained power at the Centre after the 2024 general elections, the report had said.
It added that a panel may be appointed to build on some of the proposals submitted to the Finance Ministry in 2019 so that the reforms may be implemented by 2024. The sources also said that no final decision has been made regarding the matter.
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While this report has now been dismissed by the Finance Ministry, it is worth nothing that following the 2023-24 Union Budget, Finance Minister Nirmala Sitharaman had already said that there were no changes regarding capital gains tax. The reason cited was that since capital gains tax was last revised in 2018, it would be too early to make further changes.
"Tax policy should not be tampered until about 25 per cent of India’s population is invested in equity," Bloomberg quoted Deven Choksey, managing director of KR Choksey Shares and Securities, as saying. At present, it is estimated that less than 5 per cent of Indians are invested in the equity markets.
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