January 27, 2021

Budget 2021: The Case For Taxing Stock Market Gains Of Billionaires

In the context of an uncertain demand outlook for many contributing sectors, Shankkar Aiyar discusses the upcoming Budget and makes the case for taxing certain stock market gains.


Excerpts below:


"To those who are bound to ask the question, the focus is on listed entities—and exclusion of private, unlisted entities—is determined by the correlation between the flow of public funds and rising valuation. Yes, taxation of unrealised gains seems unusual but it is already embedded in the system – in the taxation of sales made but proceeds not received and in capital gains of immovable assets.


What the quantum of taxable gains would be depends on the timeline. An Oxfam Report ‘The Inequality Virus’ states “India’s 100 billionaires have seen their fortunes increase by Rs 12, 97,822 crore since March 2020.” The extent of the gain can be ascertained by filings with stock exchanges, SEBI, the Ministry of Company Affairs and valuations are in the public domain."


Read the full article here.


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