Government told the Parliament, there is no plan to reduce the tax on the purchase and sale of shares

Multiple Tax On Equity: The Central Government has made it clear that it has no plans at present to reduce the tax on the purchase and sale of shares. The government has said this in the Rajya Sabha in response to the question asked during the question hour.

Rajya Sabha MP Rajmani Patel had asked the Finance Minister whether the government is considering reducing the tax on buying and selling of shares. So while answering this question in writing, Minister of State for Finance Pankaj Chaudhary said that at present no such proposal is under consideration before the government. Rajmani Patel also questioned the government whether the government imposes various types of taxes on the purchase and sale of shares, which include income tax, GST, stamp duty and security transaction tax?

Answering this question, the Minister of State for Finance said that under the Income Tax Act, 1961, income from trading in shares is taxed in the same way as income from business or profession is taxed. He said that apart from this, the profit made on selling the shares at a profit is considered as capital gain and capital gain tax is levied on it. Along with this, there is a provision to levy security transaction tax on the transaction of buying and selling of shares.

Pankaj Chowdhary said that income tax is charged on business income or capital gain. Security transaction tax is not a tax on income, but it is a type of transaction tax which is charged under a different rule. Although the Minister of State for Finance has made it clear that GST is not applicable on buying and selling of shares. Shares are excluded from the purview of Goods and Services under the GST law. GST is levied only on the supply of Goods and Services.

Let us tell you that after holding a share for more than a year, if it is sold, then there is a provision to impose 10% capital gain tax on the profit. And if the shares are sold within one year of purchase, then 15% short term capital gain tax is levied on it. In 2018, the Modi government brought the provision of capital gains tax on equity.

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