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- The Budget had brought back long-term capital gains tax, disappointing investors.
- India’s investment-to-GDP ratio was not adequate, Governor observed, given the fact that capital in the country was taxed at five different stages, hindering investments.
- The Budget has proposed that long-term gains of more than Rs.1 lakh from investments in stocks, would attract long-term capital gains tax at 10%.
- “We need to keep in mind the taxation on capital in India is from several sources and I think, at the marginal rate, it adds up … so from back of the envelope you have a corporate tax rate, you have a dividend distribution tax rate, for dividend income above Rs10 lakh you have the marginal tax rate, you have a securities transaction tax and a capital gains tax. So, you have five taxes on capital. And you know that would have an impact on investment and savings decisions,” he said.
- The Economic Survey, released last week, also pointed out that the overall savings and investment rate scenario in the economy was not ‘heartening’.
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