Centre may introduce changes to capital gains tax rules, says report


The government may soon introduce changes to the capital tax regime, making it simpler. The primary consideration will be parity within the assets, and the Centre may even consider changing the tax rates, a report in The Economic Times (ET) said. The multiple holding periods may also be rationalised.

“The regime is slightly complex. There is a case for simplifying and rationalising it,” an official aware of the matter told ET.

A task force had recommended changes in benefit rules in 2019. It is expected to be the main basis of the review.

Under the current rules, equities and preference shares, equity-based mutual funds, zero coupon bonds and UTI units are considered long-term assets if held for over 12 months.

Debt-oriented mutual funds and jewellery are considered to be long-term assets if held over 36 months. On the other hand, or immovable property is regarded as a long-term asset if held over 24 months.

As per the recommendation of a task force headed by Akhilesh Ranjan, a former (CBDT) member, the assets must be categorised into three classes, equity, non- and other property. It recommended that the benefit must be given to all except . It is currently allowed on debt funds and .

It further recommended a 10 per cent on the sale of assets held for over 12 months. For equity held for less than 12 months, it asked for a 15 per cent short-term .

However, for non-equity financial assets, long-term capital gains were recommended to be 20 per cent if held over 24 months.

For other assets, it recommended a 20 per cent tax with on gains if held for over 36 months, ET added.

What are the current capital gains tax rules?

Under the current rules, long-term capital gains are taxed at 20 per cent. In the case of equity, if the gain is more than Rs 1 lakh, a 10 per cent tax is levied. However, a 15 per cent tax is charged in the short term.

Short-term capital gains are taxed on other assets after being clubbed with the .


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