Finance Minister Nirmala Sitharaman said on Tuesday, October 13, 2026 that the government is open to hearing suggestions on the long-term capital gains (LTCG) tax, including calls to remove it, during consultations for the next Union Budget. She was speaking at the Bloomberg New Economy Forum in New Delhi. She did not announce any change in the tax.
What the Finance Minister said
News On AIR reported that the suggestions would be considered during the consultations held before the Budget. According to the IANS report carried by The Hans India, Sitharaman said preparations for the Budget have begun and that this was not the right moment to say what the government would consider. She did not rule out changes either.
She said investors in India and abroad have been discussing how capital gains are taxed. The Tribune quoted her as saying: "LTCG, many individuals are discussing, including both Indian and international investors."
The discussion, she said, also covers the securities transaction tax (STT) and whether different asset classes should be taxed in the same way.
The tax as it stands today
The rules below are as reported by IANS. Nothing in them has changed.
| Item | Current position |
|---|---|
| Listed shares and equity mutual funds held for more than one year | Gains taxed at 12.5% |
| Exemption | Gains up to Rs 1.25 lakh a year |
| Before the July 2024 Budget | 10% tax, Rs 1 lakh exemption |
The Budget presented in 2026 kept this structure and raised STT on futures and options trades, IANS reported.
Why the question has come up
IANS reported that industry groups and foreign portfolio investors have argued for some time that the capital gains tax makes Indian equity markets less competitive, and that foreign investors have been net sellers of Indian shares for long stretches of this year.
On government finances, News On AIR reported the Finance Minister as saying that the government will keep a disciplined fiscal approach while protecting spending on welfare, education and healthcare.
Other points from her address
- India is pursuing both advanced chips and the simpler semiconductors used in everyday products.
- The growth of artificial intelligence and data centres will raise the demand for electricity and for reliable power infrastructure, and that power should come from sustainable green energy.
- On the rupee, The Tribune reported her as saying that the Reserve Bank of India aims to manage volatility, not to fix the exchange rate.
The forum was held on the day the International Monetary Fund published its new forecasts. See our report on the IMF raising India's growth forecast to 7%.
Key points for investors
- No change yet. LTCG on listed shares and equity mutual funds remains 12.5% above Rs 1.25 lakh of gains in a year.
- A statement, not a decision. The Finance Minister said views will be heard. She gave no indication of which, if any, would be accepted.
- Any change needs the Budget. Tax rates are changed through the Finance Bill, which is presented with the Budget and passed by Parliament.
What happens next
The Union Budget for 2027-28 is due to be presented on February 1, 2027, according to IANS. The Finance Ministry normally holds pre-Budget meetings with industry, market participants and other groups in the weeks before it. Any decision on LTCG or STT would be known only when the Budget is presented.
IANS also reported that the Sensex and the Nifty each closed more than 1% higher on October 13 after the remarks. This article is a news report and is not investment advice.
