The Finance Ministry on Tuesday ruled out the possibility of tweaking capital gains tax regime.

“It is clarified that there is no such proposal before the Government on capital gains tax,” the Ministry said in a tweet. This response was made to a report by news agency Bloomberg earlier in the day.

The agency said in a report, quoting persons in know that India is preparing an overhaul of its direct tax laws to replace a byzantine matrix of rules and help Prime Minister Narendra Modi reduce income inequality if he returns to power next year.“

At the heart of the rework is, potential increases in capital gains taxes for top income earners, the people said, asking not to be identified as the details are private. For instance, while India levies a tax of as much as 30 per cent on income, it taxes gains on certain asset classes such as equity funds and stocks at a lower rate,” the report said.

Earlier, before the presentation of Union Budget, there was strong buzz about restructuring of capital gain tax mechanism. At that time, it was said that current capital gains tax regime is fairly complicated with different asset classes viz. equity, debt and immovable property, varying tax rates, etc. It is expected that government may look at rationalising tax rates, holding periods, etc.., which could ease investor concerns and plug tax leakages due to arbitrage opportunities.

However, the Budget did not make any change.