In his Budget speech, FM Jaitley said, "I propose to tax such long term capital gains exceeding Rs 1 lakh at the rate of 10% without allowing the benefit of any indexation. However, all gains up to 31 January, 2018 will be grandfathered" Jaitley said.
Finance Minister Arun Jaitley announced long-term capital gains (LTCG) tax in his Budget speech four days ago, you'd expect investors to turn their backs on shares and equity-oriented mutual funds.
Mutual funds investments have seen a huge rise in inflows. Domestic funds had invested a staggering over Rs 1 lakh crore in the stock market last year, much higher than over Rs 48,000 crore infused in 2016 and more than Rs 70,000 crore in during 2015.
The economic survey report re-iterates this fear. The report notes that markets expect rapid growth, triggering the run-up in stock prices.
Any profit or gain made after holding shares for more than one year is known an long term capital gain.
The move is likely to hit investor sentiment as domestic mutual funds had pumped in a staggering over Rs 1 lakh crore in the stock market last year, much higher than over Rs 48,000 crore infused in 2016 and more than Rs 70,000 crore in during 2015.
Long term capital gains exceeding Rs 1 lakh on sale of equity shares/units of Equity oriented Fund are proposed to be taxed at 10% without allowing any indexation benefit, said Finance Minister Arun Jaitley in Lok Sabha during his Budget speech.
Agro chemicals makers PI Industries Ltd rose nearly 5 percent, Excel Crop Care stock was up 2.74 percent and Monsanto India rose as much as 2.3 percent at 12:04 pm. Jaitley also said minimum support price (MSP) of agricultural commodities will be fixed at at least 150% of input price per farm
Across-the-board selling and volatility have affected sentiments on the Dalal Street today. Traders are also sceptical the government may impose long-term capital gains (LTCG) tax on equities.
Government is likely to focus on strengthening the rural sector in the upcoming Union Budget on 1st February 2018.
On February 11 2016, the Sensex stood at 22,951. Since then, it has gained nearly 13,000 points, translating into a gain of 56%. The Nifty has gained nearly 4,000 points or 57% from 6,976 since 11 February 2016. The indices which have logged record gains this year will face Narendra Modi government's last full year Budget on February 1.
According to reports on budget expectations, the government is considering to increase the tenure of short term capital gains (STCG) by over 2 years in the Union Budget that will be presented on 1st February 2018.
he budget that will be presented on 1st February 2018 will be the last full budget before the 2019 general elections.
The upcoming budget is likely to provide a boost to the infrastructure sector and job creation. Government is likely to provide a higher allocation to road, power, telecom and IT ministries. Companies in infrastructure space are likely to benefit as increased capital spending will improve order books, top line and profits.





