The government is considering a tax relief package for equity investors, but an announcement before the Union Budget is unlikely as the proposals are still being examined and the draft has not been finalised, people familiar with the matter said.
The package is expected to focus on two broad objectives of bringing greater balance to the tax treatment of different asset classes and addressing disparities in taxation within the equity market.
The Finance Ministry is reviewing suggestions received from various stakeholders. These include proposals for different tax rates for promoters and retail investors, as well as separate tax treatment for foreign promoters and foreign investors.
Stakeholders have also suggested changes to the existing securities transaction tax (STT) rates on cash market trades, futures and options. Another proposal under consideration is to extend the long-term capital gains (LTCG) holding period for equities to three years.
The suggestions are being examined, and no final decision has been taken on the structure or scope of the package, the people said.