India weighs LTCG tax cut, dollar-based taxation for FPIs: Why the rethink ahead of Budget?
CNBC-TV18 1 hr ago·26 Oct 2026, 12:27 pm
The Indian government is reportedly reconsidering its approach to capital gains taxes for foreign investors ahead of the next Union Budget. Sources indicate a potential shift from the current rupee-based taxation system to one based on the US dollar. Additionally, there are discussions about lowering the Long-Term Capital Gains (LTCG) tax rate, a move that could make Indian equities more attractive to Foreign Portfolio Investors (FPIs).
This policy rethink is significant as FPI outflows have been increasing recently. A reduction in tax rates or a switch to dollar-based taxation could improve the risk-adjusted returns for foreign investors, potentially reversing the recent sell-off in Indian markets. For retail investors, this signals that the government is actively looking to stabilize foreign inflows and boost liquidity in the domestic equity market.
Investors should watch the Finance Minister's budget speech for official confirmation of these proposals. If implemented, these changes could lead to a sustained recovery in foreign investor sentiment. However, the final decision will depend on the government's broader fiscal priorities and the need to balance revenue generation with market stability.
Excerpt from CNBC-TV18
Published On Oct 26, 2026 | 17:57 IST Last Updated On Oct 26, 2026 | 17:57 IST The government is considering changes to equity capital gains tax ahead of Budget 2027-28, including a possible rate cut and dollar-based taxation for foreign investors, as outflows mount and SBI calls for scrapping LTCG. The Indian…Read the original at CNBC-TV18
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Key takeaways
- Concerns State Bank OF India (SBIN).
- Category: Corporate Action.
- AI reads the tone as negative (potentially bearish) for the stock.
- Flagged as a high-impact, market-moving story.
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