Originally posted by ananthap So HOW-TO become a corporate? ...

Good one !

9Stock, I hope you also downloaded the discussion document. That tries to convince the public of the various new measures whereas the "bill" is totally formal and dry and to the point.

From what I can see, the drafters seem to have selectively picked examples from other countries to boost their case to remove personal exemptions and to re-impose LTCG tax at the same rate as STCG tax. The removal of STT has been cheered by the trading class.

It is the investor (direct or via equity MFs) who will be badly hit with the re-imposition of LTCG tax. The only distinction between STCG & LTCG taxes will be the indexation benefit which, to me, is as fictional as the gormint-manipulated inflation figures.

The discussion document also acknowledges the possibility that the sale of an asset can suddenly push one into a higher tax bracket but this hasn't worried the drafters.

10.4 ... Secondly, the capital gain realized when a capital asset is sold is usually the accumulated appreciation in the value of the asset over a number of years.  The 'bunching' of such appreciation in the year in which the asset is sold pushes the seller into a higher marginal tax bracket if the value of the asset is sufficiently high. If no special treatment is accorded to capital gains, a progressive income tax would discriminate against those whose income from capital assets is in the form of capital gains as compared to those whose income is derived from interest or dividends.

And the usual state of affairs will continue. We will be taxed on par with developed countries but we will not benefit as they do from the superior amenities and social security.



Edited by Hitesh Shah - 22/Aug/2009 at 5:21pm

Originally posted by catcall I like the choice of words (euphemism) in the capital gains tax issue, which says " abolishing the distinction between short term and long term capital gains tax" rather than talking of the reitroduction of Long term cap. gains tax. It does make it a bit milder ( for those who take the trouble of paying capital gains tax on their stock market plays)

Perhaps, we're moving to 1984 (of Orwell), in which words like bad were replaced by ungood and very bad by double plus ungood.

I forsee a lot of slippage here . If they had stuck to STT (even at a higher rate) and removed STCG & LTCG taxes entirely on equity traded on the stock exchanges they would certainly get revenue each and every day! And that too on the principal amount! And avoidance / evasion would be jeeero!

I guess a similar thing is happening with all those doing intraday trading at home! They must be playing the system - banking on the probability of not being caught




Edited by Hitesh Shah - 16/Aug/2009 at 9:57am

Whichever way you look at it, public= scr*w*d.