LTCG tax on equities: Govt may restructure rates in coming weeks; how much could investors save at 10%, 5% or 2%?
Mint 1 hr ago·27 Oct 2026, 5:45 am
The government is reportedly exploring a restructuring of the long-term capital gains (LTCG) tax on equities, with potential new rates of 10%, 5%, or 2% under consideration. This proposal comes ahead of the Budget 2027 and aims to provide relief to investors by lowering the tax burden on profitable equity investments. The current LTCG tax rate stands at 12.5% on gains exceeding ₹1.25 lakh, and the proposed changes suggest a significant reduction in this levy.
For investors, a lower LTCG rate would directly improve post-tax returns, making equity investments more attractive. If the ₹1.25 lakh exemption remains unchanged, a 10% rate could save investors roughly ₹2,500 on a ₹2 lakh gain, while a 5% rate would save ₹5,000. A 2% rate would offer the maximum benefit, saving ₹7,500 on the same gain. This move could boost investor sentiment and potentially increase participation in the stock market.
Investors should watch for official announcements during the upcoming Budget 2027. The final decision on the new rates and the exemption limit will be crucial. Until then, investors are advised to stay informed and consider the potential impact on their portfolio strategies, keeping in mind that tax planning should align with broader financial goals.
Excerpt from Mint
The government is considering changes to the long-term capital gains tax on equities before Budget 2027. Here is the current 12.5% LTCG rate, why a cut is being discussed, and how much investors could save at 10%, 5% or 2% on gains of ₹ 2 lakh, assuming the ₹ 1.25 lakh exemption stays. The government is considering…Read the original at Mint
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