SBI Research calls for scrapping LTCG tax on equities amid record FPI outflows
BusinessLine 1 hr ago·12 Oct 2026, 1:56 pm
SBI Research has suggested removing the long-term capital gains (LTCG) tax on equities to address the ongoing trend of foreign portfolio investor (FPI) outflows. The research arm argues that higher tax rates are discouraging foreign investors from holding Indian stocks, which hurts the country's foreign exchange reserves and market liquidity.
For investors, this proposal highlights the delicate balance between fiscal policy and market sentiment. Reducing the LTCG tax could make Indian equities more attractive to foreign investors, potentially stabilising the market. However, it also raises questions about the government's revenue strategy and its willingness to adjust tax rates to boost foreign inflows.
Investors should watch for any official response from the government or the Finance Ministry. If the proposal gains traction, it could lead to a policy shift that benefits the broader market. Until then, market participants will closely monitor FPI flows and any signals of policy changes.
Excerpt from BusinessLine
Amid heavy outflows, economists at the country’s largest lender, SBI, on Monday called for abolishing the long-term capital gains (LTCG) tax on equities which can help ensure such investors stay invested longer. “The government must seriously look into anchoring hot money flows into equity segment by extending the…Read the original at BusinessLine
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- Category: Stocks.
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