Income Tax Department clarifies No proposal before Government regarding Capital Gains Tax

This Clarification was issued earlier in the day, when it was announced that India is considering overhauling its direct tax laws in order to streamline a complicated system of procedures and allow Prime Minister Narendra Modi to address income inequality if he wins election next year.

According to a press article quoting sources, the centre is preparing to raise capital gains taxes on high-income individuals. According to the sources, the rethink is centred on prospective increases in capital gains taxes for high-income individuals. For example, while India taxes income up to 30%, profits on certain asset classes such as equities funds and stocks are taxed at a lesser rate.

“This isn’t progressive and goes against the principle of equity,” one of the participants stated. “A panel may be appointed to build on proposals submitted to the Finance Ministry in 2019 with an eye towards implementation in 2024, though no final decisions have been made,” the sources said on condition of anonymity because the details are secret.

According to the article, the government hopes to “replace India’s complicated tax system with a simpler law to draw in companies looking to shift their operations out of China amid growing tensions between Washington and Beijing” with a new direct tax code.

While the government has acknowledged the need for capital gains tax reform, officials from the finance ministry have declined to address it at this time.