Government may change LTCG tax on shares. How much could your post-tax gains change?

The government is examining a possible restructuring of long-term capital gains (LTCG) tax on equities, a move that could affect how much investors retain when they sell shares at a profit. While no change has been announced, the review could have implications for retail investors as well as foreign portfolio investors. Currently, LTCG on the sale of listed equity shares is taxed at 12.5 percent on qualifying gains exceeding Rs 1.25 lakh in a financial year, subject to applicable conditions.

The tax applies to eligible gains from shares held for more than 12 months. Unlike the earlier regime, the current framework does not provide indexation benefits. According to a Moneycontrol report citing sources familiar with the discussions, the government is examining the LTCG framework, including how India's tax rates compare with those in major economies. What if the government changes the rate?