Paradigm shift in Capital Gains Tax

As per proposed Direct Tax Cade there is no much change in capital gain tax provision as far as investment assets are concerned, only change is that the long term asset concept in the case of investment assets were no longer exist. The present distinction between short term and long term on the basis of the length of the holding of the asset will be eliminated. The capital gain will be equal to full consideration from the transfer of the investment asset minus the cost of aquisitio, cost of improvement thereof and transfer related incidental expenses. In the case of capital asset which is transfered any time after one year from the end of the financial year in which it is acquired, the cost of acquisition and cost of improvement will be adjusted on the basis of cost inflation index to reduce the inflationary gain.

In view of this I am of the opinion that stock markets will not be hurt due to the introduction of new DTC.

Good analysis, Makrandji, thanks.

Government should not have done this, I think. Investments by retail investors could be traced by Government, 'sitting on its chair'- because PAN is compulsory now for any transactions. Income tax dept can trace everything, if it puts our PAN on tracing code. Instead, by encouraging Long term investment, market could have been given stability.

HEADS I WIN.... TAILS YOU LOSE!!! For the government its a brilliant strategy as the investors will increase for sgort term gains.. So from a purely government persepctive, there would be more influx of MONEy into the market that would increase cash flow and liquidity...

WIN WIN ratio for the government! Good debate Mr. Joshi!!