Archive · 18 Dec 2025
Investors Urge LTCG Tax Reforms
Some important people in finance are asking the government to change the rules about taxes on money made from selling stocks after a long time.
They say that only a small number of people keep their investments for more than three years, and high taxes are making it hard for them to do so.
They also point out that when foreign investors took their money out, Indian investors stepped in to support the stock market.
They believe that the government should do more to encourage these Indian investors by lowering taxes and making the rules fairer.
They also mentioned that bank deposits are growing slower, which makes loans more expensive and hurts small businesses.
The investors want the government to reduce the tax on long-term investments and adjust for inflation to make it fairer for people who invest for a long time.
Only 30% of Systematic Investment Plans (SIPs) are held for more than 3 years, indicating a lack of long-term investment.
Gurmeet Chadha and Raghav Chadha urged Finance Minister Nirmala Sitharaman to reconsider the LTCG tax on equities.
Foreign portfolio investors withdrew ₹1.6 lakh crore from Indian equities in 2025, while domestic investors invested ₹7 lakh crore.
Raghav Chadha proposed increasing tax-free limits on savings account interest and providing tax relief for long-term fixed deposits.
The government increased the LTCG rate from 10% to 12.5% and the short-term capital gains tax rate from 15% to 20% in July 2024.
- Who
- Gurmeet Chadha (Complete Circle CIO) and Raghav Chadha (AAP MP)
- What
- Urging Finance Minister Nirmala Sitharaman to reconsider LTCG tax on equities
- When
- December 17, 2025
- Where
- India
- Why
- To encourage long-term investments and reward patient risk capital
Investors and Policy Voices
Government
LTCG Tax Rate
Investors and Policy Voices
Reduce LTCG tax rate to 10% or less to reward long-term investors.
Government
Maintain the current LTCG tax rate of 12.5% to ensure adequate revenue.
Indexation
Investors and Policy Voices
Restore indexation to reflect real gains and adjust for inflation.
Government
No indexation to prevent tax evasion and ensure fair taxation.
STCG Tax Rate
Investors and Policy Voices
Lower STCG tax rate to support market depth and encourage long-term investments.
Government
Maintain the current STCG tax rate of 20% to discourage short-term speculation.
- Current LTCG Rate
- 12.5%
- Exemption Limit for Listed Equity LTCG
- ₹1.25 lakh
- Short-Term Capital Gains Tax Rate
- 20%
- Foreign Portfolio Investor Withdrawals (Jan-Dec 2025)
- ₹1.6 lakh crore
- Domestic Investor Investments (Jan-Dec 2025)
- ₹7 lakh crore
- Percentage of SIPs Held for More Than 3 Years
- 30%
- Proposed Change
- Reconsideration of Long-Term Capital Gains (LTCG) tax on equities
- Bank Deposit Growth (FY 2024-25)
- 10%
- Bank Deposit Growth (FY 2023-24)
- 13%
