Finance Minister Nirmala Sitharaman has acknowledged concerns raised by Indian and international investors over long-term capital gains (LTCG) tax, securities transaction tax (STT) and the taxation of different asset classes ahead of the upcoming Union Budget.
Speaking on the taxation debate, Sitharaman said preparations for the Budget had begun, making it premature to indicate which proposals the government might consider.
“We are very close to the budget, and the preparation for the budget has started, and it may not be the best time for me to say what I will or what I will not consider,” she said, adding that she would tread cautiously on the subject.
The Finance Minister noted that investors within India and those based overseas had raised questions about long-term capital gains taxation. She highlighted the continuing debate over the securities transaction tax imposed on transactions in the securities market.
Sitharaman recalled earlier arguments that LTCG tax and STT operated simultaneously, prompting calls to retain only one of the two levies. She said discussions surrounding market taxation, transaction taxes and the treatment of different asset classes had remained prominent.
The Finance Minister explained that the government had aligned the taxation of asset classes two years ago to establish parity among investment options. She clarified that the move was not intended to increase taxes but to bring different asset classes to a comparable level.
According to Nirmala Sitharaman, the objective was to prevent investors from favouring particular investments simply because they offered greater tax-related leverage.
Sitharaman described the continuing discussion as healthy and expressed her willingness to hear different perspectives.
Investors await the government’s stance on capital gains tax and market levies in the upcoming Union Budget.
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