Finance Ministry says no proposal under consideration to scrap LTCG tax on equities

The Union Minister of State for Finance, Pankaj Chaudhary, on Monday, July 20, 2026, said there is currently no proposal to scrap the long-term capital gains (LTCG) tax on equity transactions for retail and domestic investors.

"At present, there is no such proposal under consideration," Chaudhary said.

The minister further said that tax policies, including capital gains tax rates, are reviewed periodically as part of the annual budgetary process and legislative revisions after taking into consideration the macro-economic parameters.

LTCG collections jump 78%

Meanwhile, according to data shared by Chaudhary, the Government revenues from LTCG tax on equity transactions jumped nearly 78% between AY 2024-25 and AY 2025-26.

The LTCG tax collections in AY 2024-25 were ₹72,249 crore, which jumped to ₹1,29,158 crore in AY 2025-26.

Talking about the LTCG collection data for FY 2025-26 and FY 2026-27, the minister said, "ITRs for AY 2026-27 (Relevant to the financial year 2025-26) and 2027-28 (Relevant to the financial year 2026-27) are yet to be filed and hence the data in respect of these AYs is not available."

What is the LTCG tax rate and what has changed fro FPIs?

The minister said that the tax rate of 12.5% on LTCG for domestic and retail investors is the same for FPIs for equity investments.

The exemption is applicable with effect from April 1, 2026. It will apply to any interest or capital gains arising to FPIs on or after April 1, 2026 in respect of investments in G-Secs.

"Additionally, this amendment was brought in recognising the importance of a competitive tax regime in attracting global capital. The Government decided to rationalise the tax treatment applicable to investments by FPls in Government Securities, by exempting such investments from income tax on any interest or capital gain. This step will align the taxation on G-Secs with many comparable jurisdictions. This will ensure stable systematic inflow of durable, patient foreign capital and long-term investors such as pension funds, insurance companies, and Sovereign wealth funds (SWFs)," the minister said.