Both the National Stock Exchange’s Nifty and BSE’s Sensex opened in the red on Monday morning, with the latter falling nearly 300 points below the red line and the 50-share Nifty breaching the 7,900-mark. Investors started the week on a selling spree after media reports on Sunday said that Narendra Modi’s recent statements had implicated that long term capital gains could be taxed in the near future. Finance Minister Arun Jaitley, on Sunday, clarified that the government had no such plans, but that didn’t seem to stem the losses on the bourses.
Currently, long term capital gains or the profits made on the sale of shares after holding them for over a year, are not taxed. On the other hand, short term capital gains, or profit made on the sale of shares held for under a year are taxed at 15%.
The NSE Nifty fell to a day’s low of 7,893.80 from its previous close. At the time of writing, the NSE Nifty was trading at 7,919.80 slightly above from the day’s low and back in the 7,900 territory but barely so.
Jaitley, in a bid to calm investors’ concerns said, “some section of the media misinterpreted the Prime Minister’s address yesterday at the inauguration of the National Institute of Securities Markets (NISM) campus in Mumbai which fuelled speculations that this is an indirect reference to the fact that there could be long-term capital gains on security transactions.”
“This interpretation is absolutely erroneous. The PM has made no such statement directly or indirectly. I was present at the function in which this speech was given. I wish to absolutely clarify that there is no occasion or opportunity to anybody to reach such a conclusion because this is not what the Prime Minister said nor is it the intention of the government as has been reported in some section of the media,” he added.
Modi, in his speech had siad that there was a need to raise taxes for capital markets. “Those who profit from financial markets must make a fair contribution to the nation building through taxes,” he had said.
All the NSE indices, barring the CNX FMCG index, were trading in the red on Monday. At the time, the BSE Sensex was trading at 25,891.50, under its crucial 26,000-level.
Source: dnaindia.com