Proposal to Implement Tax on Business Share Income

A high-level advisory committee chaired by Vidhyadhar Mallik has recommended imposing income tax on business share income according to the Income Tax Act. In a public report released on Sunday, the key suggestions are:

- Business Share Income: Individuals engaging in business share trading should be subject to personal income tax calculated based on their earnings as per the Income Tax Act.

- Capital Gains Tax: Increase the capital gains tax on listed shares currently trending upward: 10% for holdings less than one year and 7.5% for holdings over one year.

- Tax Rates: Adjust the tax rate to 39% for other businesses based on annual income calculated against profits derived from share trading.

- Loss Adjustment: Allow adjustment of losses incurred from share trading against taxable income.

- Definition of Business Income: Propose defining business income based on annual turnover and the number of business transactions.

- Opposition and Support: Some investors oppose these suggestions, citing potential deterrence to investment. Committee Chair Mallik defends the proposal, stating it serves the interests of investors.

While this proposal may raise concerns among major investors, its implementation is expected to streamline and make the tax system more transparent and organized.