November 30, 2022

The budget may change the capital gains tax regime. Investors can get relief in the budget, know what decision is being expressed?

A 10 percent tax is levied on long-term capital gains on shares held for more than one year. The rate of tax on capital gains on bonds and immovable property held for three years and two years is 20 percent.

Possible changes in capital gains tax in the budget

Capital gains tax on equity shares, bonds and immovable property can be changed in the budget. An official said the move could be taken to eliminate differences in different tax rates and property holding periods. He said that there is a possibility of change in capital gains tax in the next financial year’s budget. The budget for the financial year 2023-24 will be presented in Parliament on February 1, 2023.

Capital gains tax is part of the budget process

Asked about possible changes in capital gains tax, Central Board of Direct Taxes (CBDT) chairman Nitin Gupta said it is part of the budget process. Nothing can be said about it. Under the Income Tax Act, the profit from the sale of both immovable and immovable capital assets is chargeable to capital gains tax. However, the law excludes personal movable property like cars, clothes and furniture. We are looking into the suggestions received from various parties, the official said.

How much is the tax?

Currently, long-term capital gains on shares held for more than one year are taxed at 10 percent. On the other hand, the tax rate on capital gains on bonds and immovable assets held for three years and two years is 20 percent. As different rates are applicable on different properties in different periods, it is expected that some changes in the tax rules may be made in this budget.

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