Government Begins Review of LTCG Tax and STT, Seeks Stakeholder Input Ahead of Budget
What Happened
The Indian government has started consulting investors, market participants and tax experts as it reassesses the long-term capital gains (LTCG) tax and Securities Transaction Tax (STT) framework, according to reports citing people familiar with the process. The review follows Finance Minister Nirmala Sitharaman's October 13 remarks that discussions around LTCG, STT and the taxation of different asset classes were ongoing, while stressing that no policy decisions had yet been taken. Current listed-equity LTCG is taxed at 12.5% on gains above ₹1.25 lakh, while STT continues to apply on eligible market transactions.
Key Takeaways
The review signals that the government is examining concerns raised y domestic and foreign investors regarding India's equity-tax structure. However, no tax cut, rollback or policy change has been announced. Any future decision is expected to balance market competitiveness with government revenue considerations.