GeneralBreaking NewsBreakingLatest News
Govt May Review LTCG Tax on Equities in Coming Weeks
Sentiment: NeutralHigh Priority
What Happened?
The Indian government is considering a review of the long-term capital gains (LTCG) tax on equities, currently set at 12.5%. This review aims to attract more foreign and domestic investors ahead of the Union Budget.
Key points
- Current LTCG tax on listed equities is 12.5%, applicable on gains over Rs 1.25 lakh per financial year.
- The government is seeking feedback on the potential removal of the LTCG tax.
- Cumulative foreign portfolio investor (FPI) outflows from equities reached Rs 3.1 lakh crore in 2026.
- The review aims to improve the competitiveness of Indian equities for foreign investors.
- No final decision on restructuring the tax has been announced yet.
Key insights
- Changes to the LTCG tax structure may lead to increased foreign investment in Indian equities.
- The government's consideration of LTCG tax removal reflects a broader strategy to enhance market attractiveness.
- The significant FPI outflows indicate a need for policy adjustments to retain investor confidence.
Why it matters
The review could influence investment decisions for both domestic and foreign investors in Indian equities.
Source
India Today
