Transaction tax

Stock market players demand the abolition of the LTCG tax

Budget 2022 expectations: As Union Finance Minister Nirmala Sitharaman is set to present her third budget on February 1, 2022, various industry insiders are busy delivering their list of demands. As the real estate sector calls for its secular industry status to be granted in the upcoming 2022 budget, stock market insiders are calling for the removal of the LTCG (Long Term Capital Gain Tax). They said that when the stock investor is already giving the Security Transaction Tax (STT), then what is the logic behind the LTCG tax. They were of the opinion that the transaction cost in India is too high and that LTCG and STT are seen as a drag on market sentiment.

Request the abolition of the LTCG or STT tax on stock market investments; Sunil Nyati, MD at Swastika Investmart Ltd said, “I think STT should be removed or at least reduced as it was originally introduced instead of Long Term Capital Gain (LTCG) but now we have both the LTCG and the STT which are not fair to Indian stock investors.The stock market penetration is increasing in India and it is expected that the government will take policy measures to ensure that the Indian market becomes more favorable to Indian stock market. investments compared to other emerging markets where the reduction of LTCG and STT could be a good step in this direction.The transaction cost in India is too high and LTCG and STT are seen as a drag on market sentiment.

Speaking about how the government’s tax policy is unfair to stock market investors; Anuj Gupta, Vice President of IIFL Securities, said, “A stock market investor faces double taxation on behalf of STT and LTCG. After paying these taxes, if an investor is able to profit from the markets , it will be added into his income from other sources as well.So a person who earns from the stock market pays the Indian government over three windows.So it is high time for Union Minister Nirmala Sitharaman to abolish the LTCG tax and creates a conducive environment for investors in the India stock market.”

Echoing with Anuj Gupta and Sunil Nyati; Avinash Gorakshkar, Head of Research at Profitmart Securities, said: “The request to remove the LTCG tax is not new. Various delegations and market representatives raised this demand on the relevant platforms, but the government rejected it citing that they would lose a fair amount. income if they abolish the LTCG tax or reduce the STT tax. But, Union Minister Nirmala Sitharaman must realize that such high taxation affects stock market penetration. If they tackle the tax structure in the stock market, more income coming into investors’ pockets will also lead to increased income tax collection. »

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