Politics · India · 2 hrs ago
India seeks views on capital gains tax and transaction levy
India’s government is seeking views from investors, market professionals and tax experts on two taxes on share trading.
The review comes as foreign investors have pulled money from Indian equities, adding to calls for relief.
Long-term capital gains tax applies to shares held for more than 12 months, while securities transaction tax is charged on both buyers and sellers.
Some market participants say the two taxes amount to double taxation on the same trade.
The government must weigh any changes against tax revenue needs, including higher fertiliser subsidies and funding for social programmes.
Finance Minister Nirmala Sitharaman said the issue had come up in talks with investors, but she would not say what she might consider so close to the budget.
The government is gathering views before deciding whether to change the levies.
India is seeking views from investors, market participants and tax experts on long-term capital gains tax and securities transaction tax.
The government is reviewing the levies as foreign portfolio investors withdraw from Indian equities.
Market participants say charging both taxes on the same transaction amounts to double taxation and may deter investment.
Any change would need to be weighed against its impact on government revenue.
Long-term capital gains tax on stocks held for more than 12 months is 12.5%, while securities transaction tax is 0.1% each for buyers and sellers.
- Who
- The Indian government is seeking views from investors, market participants and tax experts.
- What
- It is reassessing long-term capital gains tax and securities transaction tax on capital market investments.
- When
- The review is under way as preparations for the upcoming budget have started.
- Where
- India.
- Why
- Foreign portfolio investors have withdrawn from equities, and stakeholders have called for changes to make markets more competitive; the government must also consider the revenue impact.
This story does not have two clearly opposing sides.
Finance minister Nirmala Sitharaman addressed a question about the levies at an event in New Delhi.
The Economic Times reported that the government had sought stakeholder views as it began reassessing capital market levies.
- LTCG rate
- 12.5% on stocks held for more than 12 months
- STT rate
- 0.1% each for buyers and sellers
- FY25 LTCG collections
- Rs 1.29 lakh crore
- FY26 STT collections
- Rs 57,522 crore
- Stock market capitalisation loss
- $924 billion since the September 2024 peak
What people are saying
There's a lot of debate,
In today's highly volatile geopolitical environment, India needs to compete with the entire spectrum of countries including the US, UK, Singapore, Hong Kong, South Korea and Taiwan, all of which do not tax non-residents on capital gains in securities traded in these jurisdictions.