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Indian capital taxation policy discussions

Overview

Discussions regarding India’s approach to taxing capital have evolved from academic recommendations to potential government policy reviews.

Economist Daniel Waldenström suggested that India address inequality by focusing on taxing capital income—such as corporate profits, dividends, and realized capital gains—rather than implementing wealth or inheritance taxes, which he noted are historically difficult to manage.

Following these considerations, the Indian government began evaluating a restructuring of the long-term capital gains (LTCG) tax on equities. This review aims to improve market competitiveness and mitigate foreign portfolio investment outflows. Current discussions involving the Securities and Exchange Board of India (SEBI) and the Central Board of Direct Taxes (CBDT) include comparing India’s 12.5% tax rate against other nations and potentially calculating LTCG for foreign investors in dollar terms to account for currency depreciation.

Entities

Daniel Waldenström · Research Institute of Industrial Economics · Securities and Exchange Board of India · Nirmala Sitharaman · India

Timeline

  1. [BUSINESS] 2 sources
    India considers restructuring equity long-term capital gains tax

    India is reviewing its 12.5% long-term capital gains tax on equities to attract more foreign and domestic investment and curb recent capital outflows.

  2. [BUSINESS] 2 sources
    Economist Daniel Waldenström advises India to tax capital income

    Economist Daniel Waldenström advises India to tax capital income, such as corporate profits and dividends, instead of wealth or inheritance to address inequality without hindering investment.

Sources

newsbytesapp.com · thecsrjournal.in