The government has said there is no proposal currently under consideration to scrap Long Term Capital Gains (LTCG) tax on equity investments.In a written reply to a question in the Lok Sabha on Monday, July 20, Minister of State for Finance Pankaj Chaudhary said, “At present, there is no such proposal under consideration.”
The minister added that tax policies, including capital gains tax rates, are reviewed periodically as part of the annual Budget process and legislative revisions after taking into account macroeconomic parameters.
Equity LTCG tax collectionsAccording to data shared by the Finance Ministry, revenue generated from LTCG tax on equity transactions stood at:₹72,249 crore in AY 2024-25, corresponding to FY 2023-24₹1.29 lakh crore in AY 2025-26, corresponding to FY 2024-25
Together, the collections for these two assessment years amount to over ₹2 lakh crore, based on the figures provided by the government.The ministry said data for AY 2026-27 (relevant to FY 2025-26) and AY 2027-28 (relevant to FY 2026-27) is not available yet, as income tax returns for these assessment years are yet to be filed.FPIs and LTCG tax on equities
Responding to questions on whether Foreign Portfolio Investors (FPIs) have been exempted from LTCG tax while domestic and retail investors continue to pay the levy, the government said the 12.5% LTCG tax rate on equity investments is the same for FPIs, domestic investors and retail investors.The Finance Ministry clarified that the Income-tax (Amendment) Ordinance, 2026 has rationalised tax treatment only for FPI investments in Government Securities (G-Secs).The exemption applies to interest or capital gains arising to FPIs from investments in G-Secs from April 1, 2026.The government said the move was aimed at aligning taxation on G-Secs with comparable jurisdictions and attracting stable foreign capital from long-term investors such as pension funds, insurance companies and sovereign wealth funds.No plan to remove LTCG taxThe government said there is currently no proposal to scrap LTCG tax for retail or domestic investors.It added that capital gains tax rates are reviewed periodically as part of the annual Budget process and legislative revisions, based on macroeconomic considerations.What is LTCG tax on equity?Long Term Capital Gains (LTCG) tax is levied on gains earned from the sale of listed equity shares, equity-oriented mutual funds and units of business trusts held for more than 12 months.Currently, long-term capital gains on these assets are taxed at 12.5% without indexation. The revised rate came into effect for transfers made on or after July 23, 2024, following changes announced in the Union Budget 2024.First Published: Jul 20, 2026 1:57 PM IST
Source link
