FM Sitharaman says govt open to hear investor concerns on LTCG, STCG taxation
New Delhi, May 25
Union Finance Minister Nirmala Sitharaman on Monday said the government is willing to listen to concerns raised by stock market investors regarding the tax system, including issues related to Long-Term Capital Gains and Short-Term Capital Gains taxation.
Speaking to the media on the sidelines of the TEXPROCIL Export Awards event on Monday, the Union Finance Minister said the government remains open to receiving suggestions and feedback from investors on the matter.
"On this specific issue, and on any issue, we are always ready and willing to listen to the people. We will certainly take their inputs," Sitharaman said while responding to questions regarding demands from stock market participants for a review of LTCG and STCG taxes.
Her remarks come amid growing discussions among market participants over the impact of capital gains taxation on equity market participation and investor sentiment.
LTCG and STCG are taxes imposed on profits earned from selling shares and other financial assets.
Short-Term Capital Gains (STCG) tax is charged when shares are sold within a shorter holding period, while Long-Term Capital Gains (LTCG) tax applies when investments are held for a longer duration before being sold.
The Union Finance Minister, however, did not announce any formal review or change in the taxation structure.
Her remarks only indicated that the government is open to hearing feedback and suggestions from stakeholders regarding the current tax framework.
The comments come at a time when domestic equity markets have been witnessing increased volatility due to global geopolitical tensions, crude oil price movements, foreign investor flows and concerns related to inflation and interest rates.
Sitharaman's statement is being viewed by investors as a signal that the government is willing to engage with stakeholders and consider their concerns regarding market-related taxation issues.
She also addressed crucial domestic fiscal issues, firmly clarifying the mechanics behind recent petrol and diesel hikes before weighing in on gold optimisation, the RBI dividend, and India's growth trajectory amid the West Asia crisis.
FM Sitharaman clarified that price hikes are purely operational and driven by global procurement realities rather than sudden government policy changes.
She also revealed that the central government had previously absorbed massive shocks--resulting in a Rs 1 lakh crore fiscal hit from reducing central taxes--to insulate consumers for over two and a half months.
— ANI
Reader Comments
As someone who's been investing in both US and Indian markets, India's treatment of LTCG is still quite favorable. 10% for gains above ₹1 lakh is reasonable compared to many countries. What concerns me more is the volatility from FII outflows - that's where policy clarity would help.
FM should also look at simplifying the tax for small traders like us. I do occasional swing trading and the whole STCG/LTCG calculation is confusing. Just have a flat rate for everything under ₹5 lakh profit. Also where is the push for more retail participation? Middle class feels like they're only taxed not encouraged to invest.
Finally some sanity! I'm a NRI and the STCG tax is killing my short-term plays. But I have to say - the government has been transparent about reasons for fuel price hikes. Rs 1 lakh crore absorbed for consumers is massive. Balancing growth and fiscal discipline is tough. Just hope they don't increase LTCG further.
Respect to FM for being open to feedback but actions speak louder than words. The middle class is already squeezed by inflation and now this tax uncertainty. Why not index LTCG for inflation like other countries? A stock that doubles in 5 years after inflation is barely real growth.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.