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SBI Research Recommends Abolishing Long-Term Capital Gains Tax on Equity
SBI Research suggests abolishing the long-term capital gains tax on equity to stabilize foreign investments. This comes as foreign investors withdrew ₹44,166 crore from Indian equities in October.
Confidence: 90%Sentiment: NeutralHigh Priority
What Happened?
SBI Research suggests abolishing the long-term capital gains tax on equity to stabilize foreign investments. This comes as foreign investors withdrew ₹44,166 crore from Indian equities in October.
AI Quick Summary
SBI Research recommends abolishing the LTCG tax on equity to stabilize foreign investments as ₹44,166 crore was withdrawn in October.
Key points
- Foreign investors sold Indian equities worth ₹44,166 crore in October.
- SBI Research proposes abolishing the long-term capital gains tax to encourage longer investments.
- The current LTCG tax rate for foreign portfolio investors is 12.5%.
- Investor sentiment is affected by high crude oil prices and a stronger US dollar.
- SBI suggests simplifying repatriation of export earnings to support foreign currency inflows.
Key insights
- Abolishing the LTCG tax may encourage foreign investors to maintain longer positions in Indian equities.
- Simplifying export earnings repatriation could enhance foreign currency inflows, benefiting the economy.
- The current economic environment poses challenges for attracting foreign capital amidst rising global bond yields.
Why it matters
The proposed changes could stabilize foreign investment in India's equity market.
Source
Times of India
