10%Tax on Long Term Capital Gains; Return by Share Market much Attractive: Jaitley, FM

A disappointment among the investors were seen as India's Union Finance Minister Arun Jaitely imposed 10% tax on long term capital gains of shares in budget proposal during budget session 2018-19. However this tax shall be applicable over the gains more than Rupees one lakh; namely, it is a relief over the small investors. Share market tumbled after the proposal.

Moreover, Finance Minister has proposed to tax at the rate of 10% on dividend income by equity focused mutual fund to maintain identical chance to the development oriented funds and dividend distribution funds.

The new provision will effect to the capital gains by the investment on shares after 31st January 2018 and the gains, before the stipulated date, shall be exempted from this tax.

Actually to maintain long term investment in the share market, the proceeds of capital gains on shares more than one year had been exempted from tax.

Jaitley said the return by share market is much attractive and the time is now to bring the capital gains under taxable income. Jaitley has added that he is proposing a minor change In the current system