Politics · India Bureau
Sebi endorses long-term capital gains tax relief amid investor calls
India's market regulator has backed moves to ease long-term capital gains taxation, echoing longstanding investor demands to scrap the levy and strengthen the nation's capital attraction. Prominent fund managers have previously flagged the tax as a significant policy misstep hampering foreign investment inflows.
LSN India ·
The Securities and Exchange Board of India (Sebi) has expressed support for reconsidering long-term capital gains (LTCG) taxation, aligning with sustained industry pressure to reform the levy. The move reflects growing consensus among market participants that the tax structure presents a competitive disadvantage in attracting international capital to Indian markets.
Investment professionals have consistently characterised the LTCG tax as a "major policy mistake" that undermines India's position relative to competing financial hubs. The criticism centres on concerns that the tax framework deters foreign portfolio investors from maintaining long-term positions in Indian securities, potentially limiting capital availability for domestic businesses and market depth.
Regulatory backing for tax relief discussions comes as policymakers weigh strategies to enhance India's appeal as an investment destination. Market participants argue that rationalising the LTCG structure could boost foreign capital inflows, strengthen equity market participation, and support broader economic growth objectives.
The debate reflects broader efforts to balance government revenue considerations with competitiveness imperatives in attracting sustained foreign investment into Indian capital markets. Industry observers suggest regulatory endorsement may strengthen the case for policy reconsideration at the government level.