LTCG tax may make stock investments less attractive, says ICAI

The removal of exemption of long term capital gains tax on transfer of shares might make investing in stock markets a less attractive option, according to chartered accountants' apex body ICAI.
In the Budget 2018-19, presented in the Parliament today, the government has decided to impose a 10 per cent tax on long-term capital gains (LTCG) made in the share market. Besides, there would be 10 per cent tax on distributed income by equity oriented mutual funds.
The Institute of Chartered Accountants of India (ICAI) said the capital gains tax regime would be less attractive to investors, adding that at a time of lower deposit rates, the alternate avenue open to the individual tax payer was the tax free gains from stock market investments.

"By removing exemption of long term capital gains on transfer of shares, this avenue may not be a preferable option any more.
"Further, the benefit of investment in bonds of NHAI/RECL etc. would be available only in respect of long-term capital gains on transfer of land or building and not any other capital asset. Also, the lock-in period has been increased from 3 to 5 years," it said in a statement.
ICSI (Institute of Company Secretaries of India) President Makarand Lele in a statement said the budget provides for huge opportunity of employment, skill development and ease of doing business.