edit Capital gains tax rejig on share sale in Modi 3.0 budget can spook

edit Market pundits also expect some changes in the tax treatment of gains arising from trades in the futures & options (F&O)

<p style='text-align:left'><div>Any changes to the existing capital gains tax structure – especially the hike in rate of taxation on sale of stocks of listed companies – can trigger a market correction, said analysts, who want finance minister Nirmala Sitharaman to maintain status quo as regards this in the upcoming budget on July 23.</div></p><p style='text-align:left'><div>“An increase in the tenure / holding period for classification of gains into long-term and short-term will not impact the market much. There might be a correction for a day or two as a knee-jerk reaction, but the markets will find their feet soon. However, if the rate of taxation on sale of shares of listed entities is hiked, the markets can dip up to 3 – 5 per cent and the sentiment can remain subdued for a month or so,” said Nishit Master, portfolio manager, Axis Securities PMS.</div></p><p style='text-align:left'><div>Currently, investors 15 per cent short-term capital gains tax (STCG) in case the holding period of the listed stocks is less than a year. On the other hand, if a seller makes a long-term capital gain of over Rs 1-lakh (where the holding period is over 12 months) on the sale of equity shares or equity-oriented units of a mutual fund, the gain made will attract a long-term capital gains (LTCG) tax of 10 per cent (plus applicable cess).</div></p><p style='text-align:left'><div>“In the Modi 3.0 budget 2024, expectations are high regarding the change in LTCG with respect to equity investments. The long-term capital gain tax was reintroduced in 2018, but one can expect changes in the same under this in the upcoming budget later this month,” said Manikandan S, tax expert, ClearTax.</div></p><p style='text-align:left'><b>Also Read</b> <a href="https://www.business-standard.com/india-news/neet-ug-controversy-supreme-court-begins-hearings-exam-ecosystem-in-focus-124070801036_1.html" target="_blank">this article</a></p>