Finance Ministry has clarified that there is no plan to remove the Long‑Term Capital Gains (LTCG) tax on equity investments. Minister of State for Finance Pankaj Chaudhary told the Lok Sabha that no proposal is under consideration to scrap this tax.
Officials explained that capital gains tax policies are reviewed regularly, usually during the Union Budget, depending on the country’s economic needs.
Recent figures highlight strong growth in collections. In the financial years 2023‑24 and 2024‑25, the government collected about ₹2.01 trillion from LTCG on equity transactions, showing a 79% rise compared to earlier years. For the assessment year 2025‑26, collections stood at ₹1.29 trillion, against ₹72,249 crore in the previous year.
At present, the LTCG tax rate is 12.5% on listed equity shares. This rate applies equally to domestic investors and foreign portfolio investors. From April 1, 2026, however, foreign investors in government securities will be exempt from tax on both interest income and capital gains. The move is aimed at aligning India’s tax system with global practices and attracting long‑term foreign capital such as pension funds, insurance companies, and sovereign wealth funds.
In summary, the LTCG tax on equities remains firmly in place, and the government has no plan to scrap it.
