Rs 400 bn: The windfall govt could have made had LTCG tax come last year

Above assumption has been made on the basis that 10% of the rise in m-cap the past one year was booked

The government would have made a windfall had the tax on long-term capital gains (LTCG) been introduced in last year’s Union Budget. Sharp rally in the equity markets and record mobilization through IPOs during 2017-18, could resulted into gains in excess of Rs 400 billion (Rs 40,000 crore) by certain assumptions.

India’s market capitalisation in the past one year has increased by Rs 40,646 billion (Rs 40.6 lakh crore) between January 31, 2017 and January 31, 2018. Assuming the manner of LTCG implementation would have been the same, the potential LTCG gains for the government translate into Rs 4,064 billion