Taxing Capital Gains or Transactions

While the finance minister is motivated primarily by revenue considerations in his approach to transaction tax by providing exemption on long-term capital gains and slashing the rate on short-term capital gains, he may have unintentionally provided additional loopholes for tax avoidance. For revenue maximisation and the efficacy of the tax system, there is a case for a uniform rate of taxation of income without differentiating on the basis of the source of income.