Capital gains tax and STT hikes leading to market hangover; more steps to curb speculation expected: Vijay Kedia

Vijay Kedia, MD, Kedia Securities, says whatever knee-jerk reaction had to come, had already come, because of the Budget and because everything is now clear. According to me, this 12.5% capital gain tax was the main hangover to the market and STT. Those things are bound to come. And more restrictions are going to come from the SEBI side also, later on, just to curb the speculation in the market, to curb the satta.

So far as LTCG is concerned, it is a very reasonable hike and the market will ultimately like it and I think the Budget has come and gone.

Minutes into the Budget, you predicted that there would be both STT and LTCG hikes.
Vijay Kedia: Yes.

Are you happy that your prediction has been correct?
Vijay Kedia: I am happy about it…


You will have to pay more taxes, you are happy about it? You are the first person ever saying this!
Vijay Kedia: It is okay. 12.5% is okay because I was expecting 20% and it is only 12.5%. As I said, hardly 1% people hold shares for one year and beyond and there is a saying “You can please all of the people some of the time. But you cannot please all the people all the time.” So, ultimately, it was bound to come.

As I said earlier, there are working hours and there are happy hours and there are hangover hours. This is hangover hours going into this market. So, there has to be some stick to cool down.

The question is, how much of a knee-jerk reaction would be okay?
Vijay Kedia: According to me, whatever knee-jerk reaction had to come, had already come, because of the Budget and all because everything is now clear. Now, according to me, this 12.5% capital gain tax was the main hangover to the market and STT. Those things are bound to come. And more restrictions are going to come from the SEBI side also, later on, just to curb the speculation in the market, to curb the satta.

So far as LTCG is concerned, it is a very reasonable hike and the market will ultimately like it and I think the Budget has come and gone.

So, this 1% fall you are saying is on the index?
Vijay Kedia: I think so. It is just a fluke. It is okay. It is over now. 12.5% is nothing.