Central Government can declare tax on long term capital gains on long term capital gains on equity investment in the general budget. Its prospect has increased in the midst of reaching the historical heights of the stock market. Many rating agencies have also indicated its announcement on February 1 in the general budget. Bank of America-Merrill Lynch (BofA-ML) said on Friday that a huge surge in the equity market has increased the probability of this tax. At present, LTCG tax is already applicable on Debt Funds and Real Estate, so it can be declared to bring Equity to the level of other assets.
BofA-ML has said in the report that the market is already on the boil and the Sensex may fall to 32 thousand by the end of 2018. Nilesh Shah, MD of Kotak Mahindra Asset Management, said that the budget would be populist, but the government could take some more steps to raise revenue. Manishi Raychowdhury, expert of BNP Paribas Securities, said that the GST Council now decides to decrease or increase indirect taxes. In such cases, it is only on direct taxes.
