Prime Minister Narendra Modi had set the cat among the pigeons before this year’s budget by pointing out in a speech that “dividends and long-term capital gains on shares traded in stock exchanges are totally exempt from income tax, even though it is not the poor who earn them”.

The markets had turned jittery for some time, fearing a change in the taxation of capital gains, but the budget left it untouched. Who benefits the most from the tax exemption on long-term capital gains?

Income-tax data shows that for assessment year 2012-13, a mere 6.9% of individual income taxpayers declared long-term capital gains.

Moreover, Two-Thirds Of Total Long-Term Capital Gains Were Declared By 4,032 Individuals Who Had Gains Of Over Rs.1 Crore During The Year. In Short, The Zero Tax On Long-Term Capital Gains Benefits Primarily The Very Rich. The Chart Has The Details.