Tax-free limit for stock market capital gain likely to be raised

The government is set to raise the tax-free limit of capital gain for individual stock market investors to Tk 2.0 million from Tk 1.0 million proposed for the next fiscal.
Individual investors are likely to be required to pay 2.0 per cent tax on capital gain from the stock market above Tk 2.0 million to Tk 5.0 million, competent sources said.
Tax would be 3.0 per cent on capital gain above Tk 5.0 million for individual investors, they added.   
Officials said Finance Minister AMA Muhith made the change in the proposed measures Thursday following demands from the capital market stakeholders.
In the proposed budget for upcoming fiscal year, the government incorporated capital gain tax on individual investors for the first time.
According to the proposed Finance Bill-2014, individual investors have to pay 3.0 per cent tax on capital gain above Tk 1.0 million to Tk 2.0 million, while 5.0 per cent tax for capital gain above Tk 2.0 million.
The budget proposal on capital gain tax for individual investors sparked criticism in the bourses.
The Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) sought reconsideration of the tax measure. They urged the government to keep existing tax-free facility for individual investors, at least, in the upcoming fiscal year.
After budget proposal, the DSE key index dropped by 3.36 per cent or 153 points in the last 20 trading days, from June 5 to 26 last.
Among other changes, opportunity to declare undisclosed income through investment in purchase of flats or apartments, without facing any question by the taxmen, would remain unchanged in the upcoming FY, although the Finance Minister vowed to scrap the provisions on several occasions.
Another tax law on declaring legally earned undisclosed money through 'voluntary disclosure' would also remain unchanged in the FY 2014-15.
However, opportunity for investment of undisclosed money through purchase of treasury bonds (T-Bonds) would be scrapped after the taxmen found it 'ineffective'.
Tax on flats and apartments would be revised downward from the proposed rates. According to the Finance Bill-2014, transfer of any structure, flat, building, apartment or floor space on the land will involve tax of Tk 90 per square feet.
In the amendment, the government would impose tax on 'per square metre' after it found the taxes will be too high as per proposed measure.
In the amendment, tax on sales of flats and apartments would be Tk 600 on per square metre.
For physically challenged persons, the endowment fund for disabled people would enjoy exemption facility until 2019. Tax-free threshold for the individual taxpayers would remain unchanged to Tk 2,20,000 in the upcoming FY. Proposed tax-free limit on interest income of savings certificates may also kept unchanged despite proposals from the policy makers.