Are LTCG tax rates in India too high? Here is a look at tax rates in other major economies
capital gains tax rates across countries to those in India, we observe a range of approaches, from straightforward percentage rates to complex systems with multiple conditions.
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New slabs announced in new income tax regime
With the Union Budget 2024 presented in the Parliament on July 23, 2024, we saw multiple changes being proposed by the Honourable Finance Minister (FM) in the Capital Gains taxation. These amendments have been proposed with the aim to address the long-standing demands of the taxpayers to simplify and rationalize the capital gains tax structure in India.
India (Effective 23 July 2024)
The FM in the Union Budget 2024 has announced that short term capital gains tax rate on sale of equity oriented mutual funds, equity shares have been increased to 20% from the existing rate of 15%. Other Short term capital gains shall continue to be taxed on applicable rates. Long-term capital gains (LTCGs) will attract a tax rate of 12.5% (without indexation benefit) as against the existing rate of 10%/20%. Additionally, the limit of exemption for LTCG will be enhanced to INR 1.25 lakh per year from the existing threshold of INR 1 lakh per year with respect to equity shares and units of equity-oriented funds, where Securities Transaction Tax (STT) has been paid.
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