Possible Changes In Capital Gains Tax, Tight F&O Norms; Union Budget
We expect tighter regulations on F&O, potentially removing some derivative products to reduce speculative trading, says expert
The Union Budget for 2024-25 will be tabled in Parliament this Tuesday by Finance Minister Nirmala Sitharaman, the first under Prime Minister Narendra Modi's third term.
With the Union Budget 2024 around the corner, Indian financial markets, corporates, and entrepreneurs have various expectations from the government. Many have voiced their requests and made presentations before the government as part of pre-budget consultations.
These stakeholders provide liquidity and capital, and their participation plays an important role in the nation's economic growth and stability.
While talking about the upcoming Budget 2024, CEO and Founder of Fhero Accounting Solutions, Prashant Bothra talked about regulatory changes that may be needed.
He anticipates changes in the Securities Transaction Tax (STT) and taxes on long-term capital gains, and short-term capital gains (LTCG, STCG), and intraday transactions.
As per definition, any profit or gain that arises from the sale of a 'capital asset' is a capital gain.
"Additionally, we expect tighter regulations on futures and options (F&O), potentially removing some derivative products to reduce speculative trading. We also request the government to consider extending the LTCG holding period for listed equity shares from one year to two or three years, encouraging longer-term investments," Bothra added.
A Research Analyst for Trustline Securities, Ankur Saraswat added, for agrochemicals, implementing Production-Linked Incentive (PLI) benefits and lowering GST rates can boost local production and reduce costs for farmers.
"In the current Union Budget, we are expecting there will be a general policy thrust aimed at higher economic growth that will provide tangible benefit for gold as well, as it is well established that income growth is the single dominant factor in long term gold demand," said Sachin Jain, Regional CEO, India, World Gold Council.
The World Gold Council also urged the government to significantly reduce import duty on gold from current highs of 15 per cent.
"Government is cognizant of the fact that gold prices have risen to historic highs of Rs 74,000 per 10 grams and at present total taxes on gold is over 18 per cent (including 15 per cent of import duty) and such high taxes act as incentives for getting gold into the country from illicit routes, impacting tax compliant industry stakeholders," said Jain.
Jain also suggested that there is a need to facilitate the orderly growth of the digital gold market to protect and promote micro-savings through transparent digital gold channels and to deter any unscrupulous fly-by-night operators from misusing the emerging opportunity. (ANI)
