Budget 2018 decoded: Lack of indexation on LTCG to hurt long-term investors

The thrust of the Budget is being seen as broadly populist but positive. This could mean a great deal of activity in the bond markets if it takes off

The stock market was braced for a populist Budget, which imposed a tax on Long-Term Capital Gains (LTCG) and made large allocations to the rural economy. At the same time, investors were hoping for a cut in corporate tax rates. The actual document was thus, broadly in line with the expectations.

The LTCG tax has been imposed, much as expected. The threshold for taxable profits is low at just above Rs 100,000 but the tax rate itself is moderate at 10 per cent and it comes into effect from yesterday! The lack of indexation will hurt long-term investors and this