There is no clarity about what happens to the Capital Gains under the Direct tax code.
There is one school of thought that the status quo ante has been maintained. This means that short term cap gains will be at 10% and long term cap gains will be at 0% in case of equities and equity mutual fund.
The second school of thought is that the LONG TERM CAP GAINS will be taxed at 15% (after some base deduction).
If capital gains and dividends are taxed differentially it will get misused. So if cap gains are taxed at 15% and dividends are taxed at 15% (dividend distribution tax) then life is not too bad, however ANY CAP GAIN TAX is a compounding interruptor and I hate it. However Pranab Mukherjee is capable of doing whatever he wants….so will have to keep our fingers crossed.
There was a huge pressure from the big boss himself and so the EET for provident fund had to be changed. Similarly the likes of Narayanamurthy, Nandan Nilenkani, Ambani, Birla,….would all be pushing against the Cap Gains tax. One is not clear whether the Congress is wanting to push such a thing through.
BUT LET ME CLARIFY….as of NOW we have no clue about the cap gains position…and that is the current situation. Do not get carried away by what you saw on television on Friday….L O L.
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