Archive · 21 Dec 2025
Low capital gains tax in India: Expert highlights trade-offs
India has a low tax rate on long-term capital gains from stocks, which is good for investors.
However, a financial expert named Nitin Kaushik says this might not be so good for regular people.
He explains that countries with higher taxes on investments, like the US, UK, Germany, and Japan, use that money to provide better healthcare, roads, and social security.
In India, public healthcare spending is much lower, and life expectancy is shorter.
While low taxes help people invest more, they might not be getting the same benefits in terms of public services.
Kaushik says the real challenge is to use tax money effectively to improve people's lives.
India's long-term capital gains (LTCG) tax on equities is about 12.5%, among the lowest in major economies.
Developed economies like the US, UK, Germany, and Japan have higher LTCG tax rates but invest more in public healthcare, infrastructure, and social security.
India's public healthcare spending is 2.1% of GDP, significantly lower than high-income nations that spend 10% or more.
Life expectancy in countries like the UK, Germany, and Japan exceeds 80 years, while India's life expectancy is lower.
Kaushik argues that the effectiveness of tax usage matters more than the tax rate itself.
- Who
- Nitin Kaushik, a Chartered Accountant and financial educator
- What
- Highlighted the trade-offs of India's low capital gains tax
- When
- Recently, in a post on X (formerly Twitter)
- Where
- India
- Why
- To discuss the broader implications of India's investor-friendly tax regime
- India's LTCG tax rate
- 12.5%
- US LTCG tax rate
- Up to 20%
- UK LTCG tax rate
- 18% to 24%
- Germany's LTCG tax rate
- 25%
- Japan's LTCG tax rate
- 20%
- India's public healthcare spending
- 2.1% of GDP
- Life expectancy in UK, Germany, Japan
- Over 80 years
- OECD public social spending
- 20-30% of GDP