Blitz Bureau
NEW DELHI: There is no proposal under the consideration of the government at present to scrap the long-term capital gains (LTCG) tax on equity transactions for retail and domestic investors, the Parliament was informed on July 20.
The Govt stated that tax policies, including capital gains rates, are reviewed periodically as part of the annual budget process and legislative revisions, after taking macroeconomic parameters into account.
LTCG tax collections on equity transactions rose from Rs 72,249 crore in assessment year (AY) 2024-25, relevant to financial year 2023-24, to Rs 1,29,158 crore in AY 2025-26, relevant to FY 2024-25. Across the two years, the government raised Rs 2.01 lakh crore through LTCG tax.
The LTCG tax on listed equities and equity mutual funds has been fixed at 12.5 per cent, which is applicable only on gains exceeding Rs 1.25 lakh per financial year. An asset is considered a long-term capital asset if held for more than 12 months.
In answer to questions on whether Foreign Portfolio Investors (FPIs) have been exempted from LTCG tax while domestic and retail investors continue to pay the levy, the minister explained that the 12.5 per cent LTCG tax rate on equity investments is the same for FPIs, domestic investors and retail investors.
