Capital Gains Tax: Revenue Secretary Tarun Bajaj says that the Capital Gains Tax Rule is complex. It needs to be made easy. The government is ready to change various rates and holding period for computing capital gains tax on shares, loans and immovable property. The main reason for this is to simplify the system.
According to Bajaj, the earnings from capital gains tax can increase 10 times to reach 80,000 crores in the current financial year.Income TaxUnder the Act, gains from the sale of both movable and immovable properties come under the purview of capital gains tax. However, movable assets like cars, apparel, furniture are out of the purview of this tax.
Capital Gains Tax Structure is Complicated
In the event of industry body CII, the Revenue Secretary said that the capital gains tax structure is complex in terms of various rates and holding period on properties. This needs to be considered. We will be ready to change it the next time the opportunity arises. The department has already studied rates in other countries like India and in the developed world.
Difference between tax rate and holding period
Bajaj said the rate of capital gains tax and the holding period are complicated. The government itself has also made it. The holding period for capital gains tax is 24 months for real estate, 12 months for shares and 36 months for loans. In view of this huge gap, work needs to be done on it.
CCI to study tax across the world
The Revenue Secretary said that the CCI will also be asked to study the prevailing rates of Capital Gains Tax across the world. Also said that whenever such changes are made, it benefits one section of the taxpayers and the other class suffers. This is the hardest part.
Government ready to consider the demand of restaurants industry
The Revenue Secretary said that the government is ready to consider the restaurant industry’s demand for the benefit of Input Tax Credit (ITC) and going back to the higher rate of GST. Presently, restaurants attract GST at the rate of 5 per cent. These rates are the same for both AC and non-AC restaurants. However, the benefit of ITC is not available with it. 18% GST is levied on restaurants of star-rated hotels with room rent of Rs 7,500 or more per day. They get the benefit of ITC. Bajaj said that the restaurant industry wants a higher rate of GST with the facility of ITC instead of just five per cent tax. The final decision will be taken in the meeting of the GST Council.
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