Neutral impactEconomy
LTCG Tax Exemption: Do Global Stock Gains Qualify For The Rs 1.25 Lakh Benefit?
NDTV Profit 2 hrs ago·13 Oct 2026, 9:59 am
The Finance Act 2023 introduced a Rs 1.25 lakh annual exemption on long-term capital gains (LTCG) from domestic equity investments. This has raised a key question for investors: does the same benefit apply to profits earned from foreign stocks?
The answer is no. For tax purposes, gains from foreign equities are classified as short-term capital gains, regardless of how long you hold the shares. Consequently, these gains are taxed at a flat 20% without any indexation benefit. This makes foreign stock investments more tax-intensive compared to the domestic market.
Investors should therefore factor this higher tax rate into their portfolio strategy. While foreign stocks offer diversification, the tax treatment differs significantly from Indian equities. It is advisable to review your asset allocation to ensure your overall tax liability remains within your comfort zone.
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