Budget 2016: Maintain status quo on long term capital gains tax, says IIFL Chairman Nirmal Jain

As Finance Minister, Arun Jaitley is set to announce the annual Budget statement on February 29, IIFL wants the government to maintain status quo on long-term capital gains tax.

While sharing views on the upcoming budget with dna, Nirmal Jain, Chairman of IIFL, said, "In the case of long-term capital gain (LTCG) tax for unlisted shares, the concern is that they extend it from one year to three years, to make it completely tax-free. The key issue here is that when securities transaction tax (STT) was brought in, it was done in lieu of no capital gains tax after one year."

Now, "if you continue with STT and introduce this, then there's going to be dual taxation, and the market will not take it gently. So, there is a concern that if LTCG is increased from one year to three years, in any case have people have kept loss at this point of time. So, that move is not going to bring in much revenue for the government. 

"STT, in a way, is giving much better revenue of Rs 12,000 crore. My guess is long-term capital gain tax won’t even give Rs 2,000 crore. So, may be status quo would be better way forward and if that happens market will heave a sigh of relief", Jain said.