Short-term capital gains tax rate may rise in Budget 2017

Higher levy on dividends earned by individuals also on govt's radar

The government is mulling a hike in the short-term capital gains (STCG) tax rate, and also a higher levy on dividends earned by individuals.

At present, the STCG (profits on sale of shares held for less than 12 months) tax rate is 15%; the government is planning to increase it to 20%, according to sources in the know. The Centre has already started gathering feedback from key market participants.

Also, although the Finance Minister Arun Jaitley ruled out changes to the long-term capital gains (LTCG) — currently tax-free — the government is toying with the idea of increasing the time frame