New Delhi, Dec 26, 2016: Finance Minister Arun Jaitley on Sunday clarified that there is no plan of the government to impose the tax on long-term capital gains in the stock market.
He was clarifying the speculation, a day after Prime Minister Narendra Modi highlighted the need for stock market participants to make higher tax contribution.
Referring to the speech by PM Modi in Mumbai, the finance minister said the interpretation being given to the speech was not correct.
“The speech has been misinterpreted in some sections of the media which have started speculating that this is an indirect reference to the fact that there could be long-term capital gains (tax) on securities transactions,” Jaitley said.
“Now, this interpretation is absolutely erroneous, the Prime Minister has made no such statement directly or indirectly,” he added.
While speaking at a SEBI event on Saturday, PM Modi termed the tax collection from securities market participants as “low”, and attributed it to the structure of tax laws and to possible fraud.
Currently, no tax is imposed on gains made on stock exchanges held for more than a year. However, a tax of 15 percent is imposed on trading stocks held for less than a year.
The PM’s statement assume much significance ahead of the Budget to be presented in the first week of February, analysts said.
“Those who profit from the financial markets must make a fair contribution to nation-building through taxes. For various reasons, the contribution of tax from those who make money on the markets has been low,” PM Modi had said without mentioning about any particular tax.
“…therefore I wish to absolutely clarify that there is no occasion or opportunity for anybody to reach such a conclusion because this is not what the Prime Minister said, nor is the intention of the government as has been reported,” Jaitley added.