Although Union Finance Minister Nirmala Sitharaman offered no clear indication of possible changes to the long-term capital gains (LTCG) tax or securities transaction tax (STT), her remarks were enough to trigger speculation, fuel debate, and prompt calculations of the potential impact of scrapping these taxes on government revenue.
As ANI reported, Sitharaman responded to a question at the Bloomberg New Economy Forum 2026 on Tuesday about LTCG and STT, saying that while the government is open to hearing views, it is premature to comment on possible measures at this juncture, as preparations for the Union Budget 2027 have already begun.
Experts and investors have been advocating for the removal of LTCG ever since it was reintroduced in 2018. However, at the current juncture, the government appears unwilling to make any changes to it.
Earlier in July this year, Union minister Pankaj Chaudhary told the Lok Sabha that the government was not considering any proposal to scrap LTCG tax for domestic or retail investors.
In 2024, the government increased the LTCG tax rate on listed equities and equity mutual funds to 12.5% from 10%, while also raising the exemption threshold from ₹1,00,000 to ₹1,25,000 per financial year.