Why is the exemption only 1L for LTCG ? Shouldn't it be higher?

Taxation
1

The government’s claim is that only 7% of the market is owned by retail investors and a lot of big players are getting away scot-free after making crores in long term profits. They claim the LTCG has been imposed so that the big players can be taxed.

In that case shouldn’t the exemption be atleast 5Lakhs so that most of the retail investors can be spared and they can bring the big players only into the tax net?

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Obviously! Some people earn only from the stock market and this is a huge blow for them.
Let’s classify the people in two categories:

  1. Income tax payers
  2. Others
    Only 1.25 crore people paid income tax in 2012-13.
    Now if you have to win votes in the election, you’d obviously focus on Category 2 people and not category 1.
    Blind are those people who believe that this is a growth oriented budget.
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Isn’t there a way to petition for this?

4

Yes! You can start one here https://www.change.org/start-a-petition
Need more and more people to sign.

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5

We middle class people keep getting hit again and again. First there was badly planned demonitization, then they attempted to tax our PF money which for many people is the only source of income for life after retirement, fuel prices hike even though the raw materials were cheap, setting minimum balance for savings accounts even though banks got lot of money deposited into them after demonitization and banks got lot of capital pumped into them from our tax money, etc.
We pay income tax and every time we spend that hard earned money we’ve to again pay tax, cess, etc. to compensate for big people who are allowed to escape easily.
No sympathy for poor and middle class. The country is sold out.

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I completely agree with you @PrashDn
We cannot do anything about it as we ( Tax payers ) are minority.
Actually if you need to live happily in India, then you need to know how to evade taxes.

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7

Although there is no textbook definition of an HNI and a retail trader.
If someone is making a profit of more than Rs 1,00,000, he is highly likely to have a capital of more than 5-10 Lakhs.
That person sir, easily falls in the 20% or 30% paying tax bracket hence need to pay LTCG
Although, I present vague numbers, the finance ministry would have put some thoughts into this

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Not necessary @Umar There are some people who put their savings (money that they’ve earned over a course of years) in equities. Also some earn only from market. In that case, a limit of 1 lakh is too less for them. Instead of having 10% tax on everyone. They should’ve taxed only those who earn a lot. (1 lakh is nothing as compared to inflation level)

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I am in doubt on which amount is this tax applicable. Is it the total amount or on the prfit made.

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@Umar Majority of that Rs. 3,67,000 LTCG that went untaxed would have come from HNIs and Institutional Investors(Making up probably 90% or more of the market participants) whose individual capital runs into several crores. It is this untapped revenue that the government wants to cash in on.

They could have set an exemption of 5Lakhs so that the smaller retail investors could be spared and plus we anyways pay STT.

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@abhra Profits above 1 Lakh on shares held for more than a year are taxed @ 10%.

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I understand it’s not a really wise decision of the government but this is how it is.
There’s always Section 10(38) to the rescue