Parliament informed on Tuesday that the government earned ₹98,681 crore from the long-term capital gains (LTCG) tax on listed securities in 2022–23, a 15% increase from the previous fiscal year.
Pankaj Chaudhary, Minister of State for Finance, revealed in the Rajya Sabha that the LTCG tax on shares and units of equity-oriented mutual funds, imposed in April 2018 at a 10% rate with an exemption for profits up to ₹1 lakh annually, has consistently grown.
The government collected ₹86,075 crore in 2021-22, compared to ₹38,589 crore in 2020-21, ₹26,008 crore in 2019-20, and ₹29,220 crore in 2018-19. Chaudhary said there is no proposal to eliminate the LTCG tax on shares and mutual funds in 2024–25.
The Budget 2024-25 increased the LTCG tax on shares and equity-oriented mutual funds to 12.5%, with an exemption threshold of ₹1.25 lakh. Long-term equities require a holding duration of more than 12 months.
Meanwhile, short-term profits from certain financial assets are now taxed at 20%, up from 15%. The loss of indexation benefits for property sales is viewed as a negative adjustment that may increase the tax burden on older property transactions, notwithstanding the lower LTCG tax rate.
