Post demonetization, a major step initiated by the government, now it is important for the government to demonstrate its commitment to growth by articulating crucial reform measures. This budget may dramatically change the pace of tax reform. Tax rates on individual tax payers could be reduced or at least the threshold and tax brackets changed to provide incentives for declaring income and perhaps, to boost consumption. Rationalization of corporate tax is expected to revive corporate spirits. While there may not be any positive surprises in capital gains taxes, there has been a widespread speculation that the government, in Budget 2017-18, may introduce new rules for taxing capital gains from stock investments. Currently, there is no tax implication for gains made from stocks that have been held for a year. This minimum holding period, according to reports, may be raised to 2 or 3 years. There is also no limit on the tax-free gains, which might be capped at a high amount. Currently, there is a 15% tax on stocks sold within a year, this may be increased to 20%.
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