Government says there is no proposal under the company
According to Minister of State for Finance Pankaj Chaudhary’s reply in the Lok Sabha, the government on Monday clarified that there is no proposal under consideration at present to abolish long-term capital gains (LTCG) tax.
The tax rate of 12.5 per cent on equity LTCG is the same for domestic retail investors and foreign portfolio investors (FPIs), Choudhary said in a written reply to a parliamentary question by Lok Sabha member Anand Bhadauria on July 20.
This reaction comes amid demand from some market participants for a cut in LTCG tax.
Chaudhary said the government has rationalized the tax treatment for FPIs on government securities only by exempting such investments from income tax on any interest or capital gains through the Income Tax (Amendment) Ordinance, 2026. The discounts are applicable from April 1.
“This move will align the taxation on government securities with many comparable jurisdictions. This will ensure a steady, orderly flow of sustainable, patient foreign capital and long-term investors such as pension funds, insurance companies and sovereign wealth funds,” Chaudhary said in response.
The central government earned ₹1.29 trillion in LTCG tax revenue during FY25, almost double the previous year’s ₹72,249 crore. Data for FY26 and FY27 are pending filing.
Chowdhury said in reply, tax rates including capital gains tax are reviewed from time to time as part of the annual budget process after considering macroeconomic factors.
first published: 20 July 2026 | 6:57 pm First
