Finance Desk – Finance Minister Nirmala Sitharaman introduced some new tax rules that affect people who invest in the stock market. These changes caused the stock market to drop because they mean that investors will have to pay more in taxes.
Higher Tax on Stock Transactions: People buy or sell stocks, they now have to pay double the tax they used to. This tax is called the Security Transaction Tax (STT).
Higher Tax on Short-Term Profits: If you sell your stocks within a year and make a profit, you will now have to pay 20% tax on that profit. This is known as the Short-Term Capital Gains Tax.
Higher Tax on Long-Term Profits: If you hold your stocks for more than a year and then sell them, the profit you make will now be taxed at 12.5%. This is called the Long-Term Capital Gains Tax.
New Rules for Certain Assets: The time you need to hold non-listed assets to get a lower tax rate when you sell them has increased from one year to two years.
Tax on Buyback of Shares: When a company buys back its shares from shareholders, those shareholders will now have to pay tax on the money they get from the buyback. Previously, this money was not taxed.
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