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April 19, 2023

IT Department explains that there is no capital gains tax proposal before the government

IT Department explains that there is no capital gains tax proposal before the government

It is made clear that the government has not presented any such plan on capital gains tax.

This clarification was issued earlier in the day that India is considering an overhaul of its direct tax laws in
order to simplify a complex set of regulations and enable Prime Minister Narendra Modi to address income inequality if he wins election next year.

A news report said that the centre is working to increase capital gains taxes for top income earners, citing
sources. The sources claimed that at the heart of the rework is potential increases in capital gains taxes for
top income earners. For instance, while India levies a tax of as much as 30% on income, it taxes gains on
certain asset classes such as equity funds and stocks at a lower rate.

“This isn’t progressive and goes against the principle of equity, said one of the people. A panel may be
appointed to build on proposals submitted to the Finance Ministry in 2019 with an eye to implement in 2024, though no final decisions have been made,” the people had said asking not to be identified as the details are private.

The report also said that with a new direct taxes code, the government is looking to “replace India’s
complicated tax system with a simpler law to draw in companies looking to shift their operations out of China amid growing tensions between Washington and Beijing”.

While the centre had accepted that there is need to reform the capital gain tax, officials from finance ministry refused any such discussion at present.

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