India Weighs Higher Capital Gains Tax to Curb Inequality: Report
NDTV
India's reliance on indirect taxes levies on consumption rather than direct taxes on capital is often cited by economists as the main culprit behind the country's poor getting left behind
India is preparing an overhaul of its direct tax laws to replace a byzantine matrix of rules and help Prime Minister Narendra Modi reduce income inequality if he returns to power next year, according to people with knowledge of the matter.
At the heart of the rework is potential increases in capital gains taxes for top income earners, the people said, asking not to be identified as the details are private. For instance, while India levies a tax of as much as 30% on income, it taxes gains on certain asset classes such as equity funds and stocks at a lower rate.
This isn't progressive and goes against the principle of equity, said one of the people. A panel may be appointed to build on proposals submitted to the Finance Ministry in 2019 with an eye to implement in 2024, though no final decisions have been made, the people added.
"It is clarified that there is no such proposal before the Government on capital gains tax," India's income tax department said in a tweet in response to this story. The benchmark stock index fell as much as 0.6% in Mumbai after the report.
