For Quick Alerts
For Daily Alerts

Tax Implication On Equity To Likely See An Overhaul: Report


To further improve market sentiment, the government is mulling over changes in income tax implications on equity investment, reported a leading business channel, citing sources. As per the report, different taxes that apply on equities such as long term capital gains or LTCG tax, STT or the securities transaction tax as well as DDT or dividend distribution tax are being reviewed. Last month to revive corporate confidence which was bogged down after dismal GDP numbers of 5% for the quarter ended June, FM Nirmala Sitharaman announced sharp cut in corporate tax rate.

Tax Implication On Equity To Likely See An Overhaul: Report

In Budget 2018, LTCG tax on sale of shares and equity mutual funds after a holding period of one year was re-introduced with a grandfathering clause. If the gains made in a financial year exceeded Rs. 1 lakh in value, LTCG @ 10% shall apply.

Securities transaction tax (STT) introduced with effect from October 1, 2004 apply at the time of purchase and sale of securities that are listed on Indian stock exchanges. STT is charged depending on the type of security traded. In delivery based trade, at the time of both purchase and sale of equity, you are required to shell out 0.1% of share value as STT.

Further, there is dividend distribution tax or DDT which is charged to dividend paying domestic companies. The effective rate is 20.35% that is inclusive of education cess and surcharge. There are reports doing the rounds which suggests that PMO and the Finance ministry are working out ways that may even result in the withdrawal of DDT.

The buzz around likely changes to income tax structure on equities cheered domestic market that saw the benchmark BSE Sensex climbing by 580 points to end trading day at 39831.84, while Nifty scaled close to 11800 points, with gains of 1.37% or 159.70.

Story first published: Tuesday, October 29, 2019, 16:24 [IST]
Company Search
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more