<b>Letters:</b> Adding to investor woes

Apropos the report, “Investors brace for transaction tax hike, less friendly budget” (January 28), after demonetisation this could be another problematic news for citizens, who are still grappling with the “digitisation wave”. 

Capital market of any nation is considered an important financial intermediary that aids economic development by making the requisite finance available from surplus units to the ones in deficit.

At present, the proportion of retail investors in India’s equity markets is low. Less than 1.5 per cent of India’s population invests in securities. This figure is far below 18 per cent for the US and 10 per cent for China. At a time when the government should be trying to improve this figure, it is making stringent proposals that might worsen the situation. 

A hike in the transaction tax on stock derivatives trading would have a negative effect. Previously, it was suggested that the short-term capital gain tax rate would be raised from 15 per cent to 20 per cent, increasing the long-term period from 12 months to 36 months and taxing dividend income. All this will add to the woes of investors.

Ankita Kalia | Chandigarh

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