Veteran Investor Seeks Tax Relief for Fixed-Income Securities

Shankar Sharma, the co-founder of Plus91, has positioned himself as a leading critic of India's long-term capital gains (LTCG) tax regime. However, his call for tax relief diverges from conventional wisdom about which investor segments require support.

Sharma's primary focus is on fixed-income investors rather than equity market participants. He contends that debt and fixed-income securities deserve more favorable tax treatment to encourage retail participation in these asset classes and support a broader investor base.

Addressing claims that the LTCG tax structure precipitated the exodus of foreign institutional investors from Indian markets, Sharma disputes this narrative. He argues that other macroeconomic and policy factors were more instrumental in driving FII outflows than taxation concerns. His position reflects a nuanced view that conflates tax policy with broader market dynamics.

The distinction Sharma draws between equity and fixed-income taxation reflects growing debate among market participants about India's investment incentive structure. As policymakers consider fiscal reforms ahead of the new financial year, his advocacy for fixed-income tax relief adds another dimension to discussions about encouraging domestic savings and capital formation.

Sharma's stance underscores tensions within India's investor community about tax policy priorities, with different segments advocating for targeted relief based on their asset preferences.