SEBI proposes capital-gains tax relief for investors

India’s markets regulator, the Securities and Exchange Board of India (SEBI), has recommended ending long-term capital-gains tax on foreign equity investors and easing the tax treatment of some domestic mutual-fund switches, according to people familiar with confidential pre-budget representations. The proposals are nonbinding and would require government approval. The government’s annual budget is expected in February, when it could decide whether to act on the recommendations. The reported proposals do not change current tax rules. SEBI proposed exempting foreign investors from the 12.5% long-term capital-gains tax on qualifying equity investments held for more than a year. It also recommended that domestic mutual-fund investors be allowed to switch between schemes without incurring the tax if they have held their units for more than a year. The recommendations were described by people with knowledge of the representations; their contents have not been publicly confirmed by SEBI. Current rules also impose a 20% short-term capital-gains tax on qualifying equity investments held for less than a year, along with securities transaction taxes on trades and withholding taxes on...