Budget 2018: Centre ups tax ante with LTCG amid boom in equity markets

Reintroduces long-term tax after 14 years; imposes 10% tax on dividend distributed by equity MFs

The Centre has finally bitten the bullet on increasing taxes on capital market investments with reintroduction of long-term capital gains (LTCG) tax after 14 years. The Union Budget 2018 proposed to levy 10 per cent LTCG tax on profits of more than Rs 100,000 on shares and other equity-oriented investments. Until now, such transactions were entirely exempt from taxes, while a flat 15 per cent rate was applicable on short-term capital gains (profits made on investments held for less than a year).
 
Market players said levy of LTCG without scrapping of the securities transaction tax