Centre Clarifies Stand on LTCG Tax

The Central Government has clarified in the Lok Sabha that it has no proposal at present to abolish the Long Term Capital Gains (LTCG) tax on listed equities. Minister of State for Finance Pankaj Chaudhary stated that there is no proposal under consideration to remove this levy for retail or domestic investors.

Responding to questions on demands from market participants to withdraw the tax and boost investor sentiment, the minister said tax policies, including capital gains tax rates, are reviewed periodically as part of the Union Budget process after considering the broader macroeconomic situation. However, there is currently no decision to revise or remove the LTCG tax.

The government also highlighted the sharp rise in tax collections from equity gains. LTCG tax collections increased from ₹72,249 crore in Assessment Year 2024-25 to ₹1,29,158 crore in Assessment Year 2025-26, registering a 78% growth. Under the existing rules, LTCG exceeding ₹1.25 lakh in a financial year is taxed at 12.5%, while short-term capital gains (STCG) on listed equities are taxed at 20%.