The Union Finance and Corporate Affairs Minister Shri Arun Jaitley today proposed to tax long term capital gains exceeding Rs.1 lakh at the rate of 10% without allowing the benefit of any indexation. Presenting the General Budget 2018-19 in Parliament here today, Shri Jaitley said that all gains up to 31st January, 2018 will be grandfathered.
Recognizing that a vibrant equity market is essential for economic growth, Shri Jaitley proposed only a modest change in the present regime. The Finance Minister also proposed to introduce a tax on distributed income by equity oriented mutual fund at the rate of 10% to provide level playing field across growth-oriented funds and dividend distributing funds. He elaborated that in view of grandfathering, this change in capital gain tax will bring marginal revenue gain of about Rs.20,000 crores in the first year 2018-19. The revenues in subsequent years may be more.
The move aims to rationalization of Long Term Capital Gains (LTCG).
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