BT BIG STORY: Can scrapping LTCG tax bring foreign investors back to Indian equities?
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Finance Minister Nirmala Sitharaman said she is open to hearing suggestions on scrapping the 12.5% LTCG tax.
- ✓Foreign investors sold over Rs 1.59 lakh crore of Indian equities between April 1 and November 2, 2026.
- ✓Experts believe removing this tax could help make Indian stocks attractive to foreign investors again.
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- MARKET
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- Business Today
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- 5 Minute(s)
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- India Economy
So far, SEBI has not commented on the report.
Currently, LTCG tax of 12.5% applies to equity investments held for more than a year. If equity investments are sold within a year, a short-term capital gains (STCG) tax of 20% applies. Investors also pay securities transaction tax (STT).
Speaking at the Bloomberg New Economy Forum in October, Finance Minister Nirmala Sitharaman said she was open to hearing suggestions on scrapping LTCG tax.
Between April 1 and November 2, 2026, FPIs sold more than Rs 1.59 lakh crore worth of equities in the domestic market. This comes on top of the nearly Rs 1.81 lakh crore they sold in FY26 and Rs 1.27 lakh crore in FY25.
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