LTCG: Should investors re-look at their equity investing strategy in FY19?

Markets, Stocks, BSE, NSE, TradeFrom FY19, the stock selling in the long-term (beyond a year) would attract a capital gain tax of 10 per cent. The major worry for investors is that the difference between the short-term and long-term capital gains taxes is just five per cent. Given this, should they re-look at their equity investment strategy in the new financial year? G Chokkalingam explains in this BS Special piece The domestic equity market is known for solid wealth creation in the long term, spanning over one to three years. In the past, those equity investors who picked up stocks successfully and also waited beyond a year got not only the opportunity for a significant wealth creation but also complete tax exemption on long-term capital gains. There was a significant incentive to hold the equities beyond a year as that would help avoid short-term capital gains tax at a 15 per cent rate. From the new financial year, the selling in the long-term (beyond a year) would attract a capital gain tax of 10 per cent. The major worry for investors is that the difference between the short-term and long-term capital gains taxes is just five per cent. In the domestic equity market such small variation is meaningless for most investors due to a huge volatility in the movement of stocks and in the whole market as well.

Source: Business Standard