The sub-committee formed by the Finance Committee to study the money and capital market have recommended arranging capital gains tax on the basis of investors' stock holding period.
The sub-committee headed by Ram Kumari Jhakri has recommended in the report to make arrangements based on investment time for the capital gains tax being levied on share trading.
A member of the sub-committee said that they have recommended levying 5% capital gains tax on share investment of less than one year, 3% for share investment of less than three years, and 1% for share investment for a time period longer than that.
According to the member of the sub-committee, the Finance Ministry will implement this rule if the Finance Committee meeting approves the report this Friday.
At present, individual investors have to pay 5% capital gains tax on share transactions while institutional investors have to pay 10%.