The government is likely to tweak stock market-related taxes such as dividend distribution tax (DDT) and long term capital gains tax (LTCG).
According to sources, the government is considering rationalisation of key equity taxes and is likely to change the applicability of DDT. Today, DDT is paid by the company that issues the dividend. Now the consideration is that the person who receives the dividend is likely to pay this tax because any tax is paid on income, and in that way income on account of dividend goes to the person who receives it. It is that person’s income and that is how this rationalisation is being considered, sources added.
The government is also considering to extend the timeline of LTCG on equities from the current 12 months to 24 months. It may also do away with capital gains on the selling of property to promote the real estate market.