In a bid to calm stock market players, Finance Minister Arun Jaitley on Sunday clarified that there was no intention to impose tax on long-term capital gains from trading in shares, and went on to blame “some sections” of the media for “misinterpreting” Prime Minister Narendra Modi’s speech on Saturday.
According to an official release on Saturday, the Prime Minister had said: “Those who profit from financial markets must make a fair contribution to nation-building through taxes. For various reasons, the contribution of tax from those who make money on the markets has been low. To some extent, it may be due to illegal activities and fraud.”
Modi further added that “to some extent, the low contribution of taxes may also be due to the structure of our tax laws. Low or zero tax rate is given to certain types of financial income. I call upon you to think about the contribution of market participants to the exchequer. We should consider methods for increasing it in a fair, efficient and transparent way.”
However, speaking on the sidelines of the DigiDhan Mela on Sunday, Jaitley said: “The speech has been misinterpreted in some sections of the media which have started speculating that this is an indirect reference to the fact that there could be long-term capital gains (tax) on securities transactions.”
The Finance Minister said such an interpretation was “absolutely erroneous,” adding that the “PM had made no such statement directly or indirectly... and therefore, I wish to absolutely clarify that there is no occasion or opportunity for anybody to reach such a conclusion because this is not what the PM said, nor is the intention of the government, as has been reported.”