Ajit Ranade: Why India shouldn't abandon capital gains tax for the sake of the rupee
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓LTCG tax revenue reached ₹1.29 trillion in 2024-25, up from ₹72,249 crore the previous year.
- ✓Ajit Ranade said India should not abandon this tax to support the rupee.
- ✓He argued that naive expectations of foreign investment cannot replace fair tax policies, as many global factors currently influence capital flows instead.
Story at a Glance
- Category
- MARKET
- Reported By
- Livemint
- Reading Speed
- 4 Minute(s)
- Market Focus
- India Economy
LTCG tax revenue yielded ₹1.29 trillion in 2024-25, up from ₹72,249 crore the previous year. These collections came both from domestic and foreign investors. Hence, any proposed concession needs a reliable estimate of revenue forgone and evidence of the additional investment it would attract. Naive expectations that foreign money will return cannot substitute for that assessment.
There is also a basic question of fairness. Tax on LTCG is a direct tax similar to that on salaries, profits and interest. Income from rising share prices should contribute to public revenue too. Complete exemption would unfairly favour listed equities over other investments. Moreover, greater dependence on consumption taxes, and tilt toward indirect taxes, places an unfair and relatively heavy burden on poorer households.
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