India Today·4 min read·hard

LTCG tax relief: Nirmala Sitharaman considers demands ahead of Budget 2027

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India Today Business Desk
LTCG tax relief: Nirmala Sitharaman considers demands ahead of Budget 2027
✦AI Summary

Indian Finance Minister Nirmala Sitharaman is reviewing demands for Long-Term Capital Gains (LTCG) tax relief amid significant foreign portfolio investor outflows. While acknowledging investor anxiety, the government remains cautious about balancing the needs of domestic versus foreign equity participants.

Why it matters

The potential tax policy shift is critical for stabilizing India's equity markets and maintaining foreign investment inflows amid a record sell-off.

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“The stakeholders are voicing their concerns louder. I will consider all this,” Finance Minister Nirmala Sitharaman said at a Financial Express event in Mumbai on November 2.Speaking at a fireside chat, the Finance Minister acknowledged the anxiety among retail investors and equity market participants over taxation and the performance of Indian equities. “I realise the sensitivity and anxiety prevailing among retail investors, especially equity participants, while not being biased either way,” she said.Her remarks come amid renewed demands for a review of LTCG tax on equities, particularly from foreign portfolio investors (FPIs), who have been pulling money out of Indian markets.Sitharaman was asked whether the government would roll out the red carpet for foreign investors to encourage dollar inflows into Indian markets.She cautioned against a policy approach that could create the impression that foreign investors were being given preferential treatment over domestic investors.“If you pitch for dollar (investors), what about…

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