Goodbye LTCG tax? SBI says government can absorb ₹50,000 crore revenue loss as Budget 2027 hopes rise
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓SBI Research said the government can afford to remove the LTCG tax as collections may fall to ₹50,000 crore in FY27.
- ✓Finance Minister Nirmala Sitharaman said, "I'll consider all this," regarding investor anxiety.
- ✓The report suggests raising exemption limits or cutting rates to help retail investors amid recent market outflows.
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- MARKET
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- Business Today
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- 3 Minute(s)
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- India Economy
SBI Research argues that weaker market returns have already reduced potential LTCG collections, making a complete withdrawal of the tax more affordable than earlier revenue figures might suggest.
Why SBI believes LTCG abolition is affordable
In its November 2 report, SBI Research argued that using FY25's LTCG collections as a benchmark for estimating the cost of abolition would be misleading.
The government collected approximately ₹1.3 lakh crore in LTCG tax during FY25, according to a parliamentary reply. However, SBI attributed these unusually high collections to strong stock market performance in the preceding financial year, when equities delivered returns of nearly 30%.
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