Helios Capital founder Samir Arora has advocated for doing away with the long-term capital gains (LTCG) tax in India, saying that the removal will be the ‘best thing to create wealth for the public’.
Replying to a user’s queries on the microblogging platform ‘X’, Arora said that ‘no LTCG tax will be the ‘best thing to create wealth for the Indian public as it will attract foreign investments and help in the divestment process of public sector undertakings (PSUs).
Arora was given two hypothetical scenarios. The first scenario was if the same government came into power after the Lok Sabha Elections 2024 with changes in LTCG tax, and the second was if a different government came to power with no change in LTCG tax for the next five years at least.
LTCG tax is levied on the profits earned from the sale or transfer of certain long term assets, such as stocks, real estate, mutual funds, or other investment tools. The tax is applicable only when the assets are held for a specific period, typically more than one year, before they are sold.
Also Read: LTCG deduction available if the gains are used to buy properties
For the calculation of the LTCG tax, the tax is charged on the profit gained from the sale of an asset held for longer than 24 months. LTCG on shares and equity-oriented mutual funds in India are taxed at a 10 per cent rate (plus surcharge and cess) if they reach ₹1 lakh in a fiscal year. LTCG is defined as profits on the sale of shares or equity-oriented mutual funds held for more than a year.
Capital gains is primarily categorised into two types –Short-term capital gains tax and LTCG. Transactions involving any such capital asset are taxable under the Income Tax Act of India, as well as cess and any other surcharge that may be applicable on the sale.
In a separate post, Arora said that the problem with sitting on cash in a fund is that it becomes a big problem for the fund manager. ‘’If you are sitting even on 10 per cent cash you start wishing that the market go down, forgetting that you are also 90 per cent invested,” he said in a post on ‘X’.
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Published: 22 May 2024, 05:41 PM IST
