CNBC-TV18 Budget Ballot | Citizens yearn for nil to low capital gain tax regime

Ahead of the interim budget, the aam aadmi is urging the Finance Minister to reduce or simplify capital gain tax under the current income tax regime. This was a recurring theme in the responses gathered by the CNBC-TV18 Budget Ballot initiative, in which boxes were placed at various locations across major cities with an invitation to citizens to make known their wishes to the Finance Minister ahead of the interim budget.

V Rengaswamy from Chennai has requested the FM to "do away with capital gain tax on the sale of securities."

He urged the FM to "instead raise funds by increasing Securities Transaction Tax (STT) which will be simpler without cumbersome calculations."

Delhi's Arpit Seth has urged the FM to "increase the exemption limit for LTCG from ₹1 lakh to at least ₹5 lakh."

Prasad from Mumbai wants a complete removal of the long-term capital gains tax. Many other citizens from various other cities echoed a sentiment similar to Prasad's.

The capital gain tax is levied on the profit realised from the sale of a 'capital asset'. The Income Tax Department's website has a list of assets that fall under this category.

For taxation, the capital assets are broadly bifurcated into two based on the period after which they are sold: short-term capital gain (STCG) and long-term capital gain (LTCG).

A STCG tax is levied on a capital asset that is held for less than 36 months or three years. In the case of immovable properties, the duration is 24 months (two years) or even less in some cases. A LTCG tax is levied on profits generated from the sale of a capital asset held for over 36 months.