Global Equity Strategist at Jefferies Christopher Wood said that there should be no capital gains tax in the current scenario in India ahead of the Union Budget presentation by finance minister Nirmala Sitharaman. Giving example of Hong Kong, Christopher Wood told CNBC TV18 that the absence of these taxes could stimulate greater investment and market expansion.
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Additionally, he said that there should a restructuring of the taxes and substantial variations in tax rates between short-term and long-term investments should be implemented.
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“Capital market tweaks in the budget will hurt markets more than the election verdict reaction,” he said.
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Experts said that a rise in capital gains tax can trigger a market correction.
Nishit Master, portfolio manager, Axis Securities PMS, said, “An increase in the tenure / holding period for classification of gains into long-term and short-term will not impact the market much. There might be a correction for a day or two as a knee-jerk reaction, but the markets will find their feet soon. However, if the rate of taxation on sale of shares of listed entities is hiked, the markets can dip up to 3 – 5 per cent and the sentiment can remain subdued for a month or so."
{{/usCountry}}Nishit Master, portfolio manager, Axis Securities PMS, said, “An increase in the tenure / holding period for classification of gains into long-term and short-term will not impact the market much. There might be a correction for a day or two as a knee-jerk reaction, but the markets will find their feet soon. However, if the rate of taxation on sale of shares of listed entities is hiked, the markets can dip up to 3 – 5 per cent and the sentiment can remain subdued for a month or so."
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