The capital gains tax conundrum

Capital gains tax suffers from varied tax rates or holding periods for different types of instruments even though they fall within the same asset class

Finance Minister Nirmala Sitharaman recently emphasised that she will be presenting merely a vote on account in February, with no “spectacular” announcements. However, bringing tax reforms to facilitate investments has been an ongoing priority for the government and it is fully cognisant of the areas that need attention. Capital gains taxation is one such aspect, where simplification and rationalisation are long overdue.

Globally, capital gains tax treatment varies depending on a country’s tax policy for encouraging investments, inflation level and need for simplicity. For instance, while Singapore does not tax capital gains at all, the US does not tax non-residents on