The Income Tax Department of India stated on Tuesday that there is currently no proposal before the government regarding the capital gains tax.
"It is clarified that there is no such proposal before the Government on capital gains tax," Income Tax Department said via a tweet.
This clarification was issued earlier in the day that India is considering an overhaul of its direct tax laws in order to simplify a complex set of regulations and enable Prime Minister Narendra Modi to address income inequality if he wins election next year.
A news report said that the centre is working to increase capital gains taxes for top income earners, citing sources. The sources claimed that at the heart of the rework is potential increases in capital gains taxes for top income earners. For instance, while India levies a tax of as much as 30% on income, it taxes gains on certain asset classes such as equity funds and stocks at a lower rate.
"This isn’t progressive and goes against the principle of equity, said one of the people. A panel may be appointed to build on proposals submitted to the Finance Ministry in 2019 with an eye to implement in 2024, though no final decisions have been made," the people had said asking not to be identified as the details are private.
The report also said that with a new direct taxes code, the government is looking to "replace India’s complicated tax system with a simpler law to draw in companies looking to shift their operations out of China amid growing tensions between Washington and Beijing".
While the centre had accepted that there is need to reform the capital gain tax, officials from finance ministry refused any such discussion at present.
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