PM misinterpreted: Jaitley calms nerves, says no plan to tax market gains
Breaking News - In a bid to calm frayed nerves of stock market players, Finance Minister Arun Jaitley on Sunday clarified the government has no intention to impose a tax on long-term capital gains from trading in shares. He went on to blame “some sections” of the media for “misinterpreting” Prime Minister Narendra Modi’s speech in Mumbai on Saturday.
Jaitley said: “The Prime Minister’s speech in Mumbai on Saturday has been misinterpreted in some sections of the media, which have started speculating this is an indirect reference to the fact that there could be long-term capital gains (tax) on securities transactions.”
He said such an interpretation was “absolutely erroneous,”, adding the “Prime Minister had made no such statement directly or indirectly... and therefore, I wish to absolutely clarify there is no occasion or opportunity for anybody to reach such a conclusion because this is not what the Prime Minister said, nor is the intention of the government as has been reported.”
Speaking at an event on Saturday, Modi 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 Share 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.” Modi also said the government will not hesitate to take tough decisions. The Prime Minister’s comments had led to fears that stocks are likely to come under pressure, with several market players saying earlier in the day that there could be a knee-jerk reaction, as stocks resume trading on Monday. “There could be a negative reaction. The markets will eye clarification on the issue. Right now, there is already uncertainty in the market and the PM’s comments could add to that,” said Sandip Sabharwal, an investment advisor.
Article By: - Business Standard.