India says no plan to scrap LTCG tax on equities

The Indian government has ruled out any immediate plans to abolish the long-term capital gains tax on equity investments for domestic and retail investors, delivering a clear response to repeated demands from market participants. The clarification was provided by Minister of State for Finance Pankaj Chaudhary in a written reply to the Lok Sabha on July 20, 2026, stating there is currently no such proposal under consideration.

The announcement follows recent concerns over a perceived disparity in tax treatment after the government introduced an exemption from the tax for foreign portfolio investors investing in government securities. Chaudhary clarified that the 12.5% long-term capital gains tax rate remains the same for both domestic investors and foreign portfolio investors when it comes to equity investments. The special exemption, enacted through a finance ordinance effective April 1, 2026, applies only to income from eligible government securities and is intended to attract stable, long-term foreign capital by aligning India's tax framework with international practices.

The government's stance underscores the fiscal importance of the levy. Data presented in Parliament shows...