No LTCG Hike in Draft Income Tax Bill, Confirms Government
Rumours of a long-term capital gains (LTCG) tax hike in the draft Income Tax Bill, 2025 are baseless. The Ministry of Finance has officially clarified that the Bill aims only to simplify legal language and remove redundant provisions — not to alter existing tax rates, including those applicable to LTCG.
What the Draft Income Tax Bill Actually Proposes
Key objectives:
- Remove obsolete and redundant provisions
- Make language more accessible and consistent
- Improve ease of compliance for taxpayers
📌 But importantly — it does NOT propose any changes to tax slabs or LTCG rates.
Where the LTCG Hike Rumour Started
Several media platforms and social media posts began speculating that the draft Bill includes proposals to raise long-term capital gains tax, especially for equity-related gains. However:
- The official clarification by the Department of Revenue stated that no such rate change is part of the draft.
- Any such amendment, if ever proposed, will be done only through a Finance Bill tabled during the Union Budget — not through a language simplification bill.
👉 CBDT Source: Press Release Clarification (PIB.gov.in)
Understanding LTCG Tax: Current Rules
| Asset Type | Minimum Holding for LTCG | Current Tax Rate |
|---|---|---|
| Listed equity shares | >12 months | 10% (above ₹1 lakh, u/s 112A) |
| Debt mutual funds | >36 months (now taxed as STCG post FY 2023–24) | Taxed as per slab |
| Real estate | >24 months | 20% with indexation |
| Unlisted shares | >24 months | 20% with indexation |
Note: Surcharge and cess apply in addition to base rates.
Expert Insight: No Rate Hike Without Finance Bill
The draft Income Tax Bill, 2025 is only a legislative cleaning-up exercise, not a tax policy move.
💡 Tip for investors:
Continue your tax planning based on current rules. Avoid reacting to unverified headlines.
Government Clarification: Key Points
- Draft Bill does not include rate changes.
- Objective is to simplify and rationalise existing law.
What Should You Do as a Taxpayer?
- No change to your LTCG planning is required
- Wait for official notifications, not speculative news
- Always verify tax news from PIB, CBDT, or efiletax.in
FAQs
Q1. Is there a proposal to increase LTCG tax on shares?
No. Government has confirmed no such proposal in the draft Bill.
Q2. Can the LTCG rate be changed outside of Budget announcements?
Not usually. Major tax rate changes are made via Finance Bill only.
Q3. Why was the Income Tax Bill 2025 introduced then?
Only to simplify legal language and remove outdated sections — not to change policy.
Summary
The draft Income Tax Bill, 2025 does not propose any hike in LTCG tax, confirms the government. The Bill only aims to simplify the language of the Income-tax Act, 1961. Investors can continue their planning based on existing tax rates.
Stay informed. Stay compliant.
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