Not a right time to restructure capital gains tax, say finance ministry sources

The government is unlikely to revamp the capital gains tax regime anytime soon because of the existing geopolitical uncertainties, a finance ministry official told Business Today Television.

"We need to respect the mood and sentiments of the market. The restructuring is needed, but not at this immediate stage. The latest change that was made to the capital gains tax regime was only in 2019. So, we have time to analyse. We will wait for the right time," the official added.

The centre has been working on plans to amend the capital gains tax in order to reduce the complexity of the structure. In 2022, the revenue department also held some discussions and invited suggestions from the industry in order to cut down on the tax arbitrage between various asset classes. The center, however, did not announce any modifications during the Union Budget announcements.

"This is not a case of putting things on the back burner. Discussions happen as and when they are required, but decisions and implementation can only happen at the right time." the official added.

The latest changes made to the regime were in 2019, when the long-term capital gains tax on listed equities held for more than a year were taxed at 10 per cent on profits above a threshold of Rs 1 lakh. Short-term capital gains on listed equities held for less than a year are taxed at 15 per cent.

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