Revenue department may further simplify capital gains tax provisions: Sources

The revenue department is currently reviewing the capital gains tax provisions and is in favour of making further simplifications in the provisions, people in the know of the matter told CNBC-TV18. Once approved, the new provisions could be part of the Budget 2023 announcement.

Capital gains tax is the profit received via the sale of an investment/capital asset.

The revenue department is of the view that simplification of capital gains tax is possible and the same could provide ease of compliance and cleaning up of complex law. It would also remove disparity between several financial instruments which fall under similar categories.

The proposal under consideration has three broad categories:

Equity:

Continue special treatment for equity

Non-equity financial: Remove disparity of rates and holding period for both short- and long-term for non equity financial assets

Non-financial: Revise indexation base of non-financial assets, revise from current 2001 base year to a more recent year.

Meanwhile, Finance Minister Nirmala Sitharaman on Monday began her pre-budget meetings, starting with industry leaders and experts in infrastructure and climate change. The meetings are being held virtually, seeking suggestions for the 2023-24 budget-making from stakeholders.

According to news reports on Monday, the Finance Minister met with agriculture and agro-processing industry, representatives from the financial sector and capital market on November 22.

She would be meeting representatives of services sector and trade bodies, besides experts from social sector, including health, education, water and sanitation, on November 24.

The pre-budget meetings with the trade union representatives and economists are scheduled for November 28.

The participants are giving suggestions on the 2023-24 Budget which will be presented in Parliament by the Finance Minister on February 1.