Do you know what short-term capital gains tax is? When do you have to pay this tax? Is it different for shares and other physical assets?
'There is a huge tax differential of 15% to 20% depending on income classification.'
According to market sources, it has been observed that most companies are filing claims under short-term capital gains, irrespective of the volume of transactions.
FIIs fear short-term capital gains would give rise to tax uncertainty and make their operations difficult, reports Pavan Burugula from Mumbai.
The finance ministry is looking at rationalising long-term capital gains tax structure by bringing parity between similar asset classes and revising the base year for computing indexation benefit to make it more relevant, an official said on Friday. Currently, shares held for more than one year attract a 10 per cent tax on long-term capital gains. Gains arising from sale of immovable property and unlisted shares held for more than 2 years and debt instruments and jewellery held for over 3 years attract 20 per cent long term capital gains tax.
Higher levy on dividends earned by individuals also on radar.
An argument used for removal of this exemption is that it is used to launder black money and bring it in as clean tax paid money by manipulating the price of less liquid shares in the market, says Harsh Roongta.
The income tax department on Wednesday issued FAQs on changes in the capital gains tax saying the idea behind it was to simplify the tax structure and promote ease of compliance. The holding period for various asset classes for the purpose of short- and long-term capital gains tax has been rationalised. The holding period of all listed assets will be now one year for the purpose of long-term capital gains tax (LTCG).
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
'Expectations are high regarding the change in LTCG with respect to equity investments.'
However if the Short Term Capital Gain is on account of shares or equity oriented mutual fund, on which Securities Transaction Tax was levied, then the gain will be taxed @ 10% only. Only gains part is charged to tax.
The Budget emerges as a measured, credible and forward-looking policy document that reinforces India's commitment to remaining a stable, reform-oriented economy amid an increasingly fragmented global landscape, says A Balasubramanian.
The Budget may tweak capital gains taxes levied on equity, debt and immovable property to bring parity in varied tax rates and holding period, a senior official said. Explaining the rationale, the official said there needs to have an alignment in tax rate and holding period for all the asset class. Changes in capital gain tax expected in Budget, the official said.
Taxpayers seeking to save tax from the sale of gold (including inherited) should reinvest the capital gains in residential property to avail of the benefit provided by Section 54F.
Investors who have capital gains, have a variety of investment avenues, wherein they can park their capital gains. We have explored below the main investment products at the investor's disposal for offsetting capital gains.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
rediffGURU Mahesh Padmanabhan answers readers' personal income tax queries.
Is the parabolic rise in silver running out of steam or just getting started? Ramalingam Kalirajan offers his take on if you should invest in silver now?
'The estimates of tax forgone on this item run into hundreds of billions.' 'And there is neither fairness nor rationality to support continuing with this tax holiday for just one class of investors, those who put their money in shares,' says T N Ninan.
The government is open to 'some tinkering' in the varied rates and holding period for computation of capital gains tax on shares, debt and immovable property, in a bid to make it simple, revenue secretary Tarun Bajaj said on Wednesday. Under the Income Tax Act, gains from sale of capital assets, both movable and immovable, are subject to 'capital gains tax'. The Act, however, excludes movable personal assets such as cars, apparels, furniture from this tax.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
'Volumes in F&O trading had gone up rapidly and, in a way, the increase in STT on F&O will protect investor interest.'
rediffGURU Vipul Bhavsar answers readers' personal income tax queries.
rediffGURU T S Khurana answers readers' personal income tax queries.
rediffGURU Vipul Bhavsar answers readers' personal income tax queries.
.jpg)
It depends on the assessing officer's interpretation. To be on the safe side, have a separate trading account.
'Large firms and their interests can dominate the narrative, even as smaller stakeholders and retail investors struggle to be heard.' 'Regulators therefore require deep subject-matter expertise to assess representations, recognise underlying incentives, incorporate the perspectives of less-visible stakeholders, and guard against bias or capture,' notes Ananth Narayan.
rediffGURU T S Khurana answers readers' personal income tax queries
Benchmark stock indices Sensex and Nifty dived sharply by nearly 2 per cent on Sunday after Finance Minister Nirmala Sitharaman proposed a hike in the Securities Transaction Tax (STT) on derivatives. Reversing the early gains, the 30-share BSE Sensex plunged sharply by 2,370.36 points or 2.88 per cent to slide below the 80,000-mark at 79,899.42 in afternoon trade as the finance minister announced a hike in STT on futures contracts to 0.05 per cent from the current 0.02 per cent.
'Long-term investors seeking sustainable gains from resilient, fundamentally strong companies may go for these funds.'
The proposals outlined in Budget 2026-27 represent a carefully crafted, multi-year strategy designed to strengthen India's big bets on the path to Viksit Bharat 2047, says Sameer Gupta.
Zero-coupon bonds suit investors with long-term goals such as retirement or education planning.
rediffGURU Vipul Bhavsar answers readers' personal income tax queries.
The Shree Ram Twistex IPO enters Day 3 with strong investor interest. Check latest GMP, subscription status, price band, company fundamentals, and expert review to decide whether to apply.
These schemes are a good choice for investors contemplating a large investment in equity funds. Instead of investing all the money in one go, they can do so in a staggered manner by parking it in these schemes and then transferring it to equity mutual funds through a systematic transfer plan.
Indexation is a technique to adjust tax payments by employing a price index which adjusts for inflation
rediffGURU T S Khurana answers readers' personal income tax queries.
Ask rediffGURU and PF, MF and insurance expert Purshotam Lal your mutual fund, insurance and personal finance-related questions.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
rediffGURU T S Khurana answers readers' personal income tax queries
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances