No proposal under consideration to scrap LTCG on equities: Finance ministry

New Delhi, Jul 20, 2026

The Union Ministry of Finance on Monday said there is currently no proposal under consideration to scrap the long-term capital gains (LTCG) tax on equity investments.

In a written response submitted to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said, “At present, there is no such proposal under consideration."

The minister added that capital gains tax rates and other tax policies are periodically reassessed during the annual Budget exercise and through legislative changes, based on prevailing macroeconomic conditions.

During FY 2023-24 and FY 2024-25, the government collected around ₹2.01 trillion in LTCG tax on equity transactions, with collections rising by nearly 79 per cent over the period.

The government collected ₹1.29 trillion in AY 2025-26, compared with ₹72,249 crore in AY 2024-25. The ministry noted that the figures are reported on an assessment year basis, with AY 2025-26 corresponding to income earned during FY 2024-25 and AY 2024-25 relating to income earned during FY 2023-24.

What is the LTCG tax rate for retail investors and FPIs?

The government said the 12.5 per cent LTCG tax on listed equity investments is the same for both domestic investors and Foreign Portfolio Investors (FPIs). 

However, the government recently changed the tax treatment for FPIs investing in government securities (G-Secs). Effective April 1, 2026, FPIs investing in G-Secs are exempt from paying income tax on both interest income and capital gains. 

The government said the move aims to align India's tax regime with global practices and attract long-term foreign capital, including pension funds, insurance companies and sovereign wealth funds.

[The Business Standard]