Capital Gains Tax

• According to recent news, market experts, including Samir Arora, are strongly criticizing India’s newly introduced capital gains tax on foreign investors, deeming it a ‘significant policy misstep.
• The tax is perceived as a deterrent to Foreign Institutional Investors (FIIs), potentially reducing foreign investment in Indian markets.
• About Capital Gains Tax:Levied on profits from the sale of capital assets.
• Capital assets include:

1. Stocks
2. Mutual funds
3. Property
4. Gold

Types of Capital Gains Tax

• Short-Term Capital Gains (STCG):

1. Applies when assets are sold within a short period.
2. Taxed at a higher rate to discourage speculative trading.

• Long-Term Capital Gains (LTCG):

1. Applies when assets are held for a longer duration.
2. Taxed at a lower rate to encourage long-term investments.