Capital gains tax too complicated, needs rework: Revenue secy
The government Wednesday said the rate structure and computation period of capital gains tax is "too complicated" and that it is ready to rework that in due course.
A capital gains tax is a levy on the profit that an investor makes from the sale of an investment such as immovable property or shares.
"The capital gains tax structure requires rework with respect to its rates and holding period," Revenue Secretary Tarun Bajaj said at a post Budget interaction organised by industry body CII.
"I think the rate and the period for which it is that we have created is too complicated. For real estate, we have made it 24 months, for shares 12 months, for debt it is 36 months. We need to work on that," Bajaj said.
He said the government has brought pathbreaking tax reforms in recent years, areas like GST and personal income tax are still work in progress and would require more attention in the months to come.
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.
The government, he said, was open to "some tinkering" in the varied rates and holding period for computation of capital gains tax on shares, debt and immovable property.
He clarified that the government has avoided annexures to Part A of the Budget this time, and the details have instead been included in the Memorandum explaining the provisions of the Finance Bill, for the sake of clarity and simplicity.
He also highlighted that the proposal for criminal liability on publishing customs data is aimed at hackers and criminals, and not towards legally published information.
Bajaj also asked India Inc to study the prevailing rates of capital gains tax across the world and give their input.
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