In an article titled “Grandfather clause in LTCG: Why it may be time to call up your tax lawyer”, it was pointed out that the grandfathering of past returns promised by Finance Minister Arun Jaitley in his budget speech is missing from the fine print of the bill in the context of foreign investors.
The drafting error created an uproar amongst taxpayers at the shoddy drafting of the Finance Bill 2018.
(FM Arun Jaitley explains long term capital gain)
Pursuant thereto, the Income-tax department has clarified that the Long-term Capital Gains on listed equities arising upto 31.01.2018 has been grandfathered for resident &non-resident assessees (incl. Foreign Institutional Investors) as per clause 31 &32 of the Finance Bill, 2018.
It is clarified that Long-term Capital Gains on listed equities arising upto 31.01.2018 has been grandfathered for resident &non-resident assessees(incl. Foreign Institutional Investors). Refer clause 31 &32 of Finance Bill, 2018 @PMOIndia @FinMinIndia @adhia03 @arvindsubraman
—Income Tax India (@IncomeTaxIndia) February 2, 2018
However, some taxpayers are still unhappy with the clarification provided by the Income-tax department.
Why could you simply not say EXEMPTED ?????? Now please also clarify Monthly Dividends are considered as Capital Gain and taxable or Tax is payable on Capital Gain after Sale ?
—Padmaja (@prettypadmaja) February 2, 2018
why not grandmothered?
—Anahita (@anahita_ramirez) February 2, 2018
Your assumption that people have understood the term used by you is laughable indeed !!!
—Manoj Sharma (@Sharma_Manoj) February 2, 2018
With due respect, but the reading of Clause 31 &32 of Finance Bill, 2018 does not in anyway imply that the grandfathering provisions are also extended to Foreign Institutional Investors. Hope necessary change is brought in the bill before enactment.
—Vishal Singh (@vrsingh1991) February 2, 2018
Can't you write in simple language what the change? What a common man will understand from this?
—Ranjeet Kumar (@rkumar02) February 2, 2018
@adhia03 Sir, Kindly clarify if shares bought prior to STT will also be eligible for grandfathering clause.
Very long term equity shareholders and senior citizens seem to need clarity. Thanks. @FinMinIndia
—Shyam Sekhar (@shyamsek) February 2, 2018