Nirmala Sitharaman says government is keen to hear LTCG tax views as infrastructure pipeline crosses $4.5 trillion

Finance Minister Nirmala Sitharaman said on Tuesday at the Bloomberg New Economy Forum in New Delhi that the government was keen to hear views on removing long-term capital gains tax during Budget consultations. She did not announce the removal of LTCG tax. Sitharaman said Indian and foreign investors had been commenting on LTCG tax.

LTCG consultations and a $4.5 trillion infrastructure pipeline

The government’s position on LTCG tax remained tied to the Budget consultation process, according to Sitharaman, rather than a decision to remove the tax. She did not give a date for those consultations.

Sitharaman said the National Infrastructure Pipeline, which was launched in late 2019, had crossed $4.5 trillion. She cited the National Bank for Financing Infrastructure and Development and the National Investment and Infrastructure Fund as institutions that had helped mobilise funds for infrastructure development.

Indian and foreign investors comment on LTCG tax

Both Indian and foreign investors had raised comments about long-term capital gains tax, Sitharaman said. She added that the discussion included securities transaction tax and whether different asset classes should receive similar treatment.

Sitharaman described the debate as healthy. Her remarks left the questions on LTCG tax, STT and asset-class treatment for consideration during the Budget consultations. Investors often use a Long Term Capital Gain Tax Calculator to estimate potential tax liability on investments, making any future changes to LTCG rules particularly relevant for financial planning.

Private capital moved into chips and renewable energy

Private capital was moving into renewable energy and chip making, Sitharaman said. She linked semiconductor chip design and packaging with India’s move into areas that would enable artificial intelligence.

The sectors she cited included data centres, semiconductors, transmission lines, renewable energy, green hydrogen and green ammonia. Sitharaman also said domestic capital was moving into renewable energy, chip design, biosimilars, drug manufacturing and maintenance, repair and overhaul centres.

India’s civil aviation sector was growing at around 16%, according to Sitharaman. She said the government had decided to manufacture advanced, finer-nanometre chips as well as less advanced chips that remained essential for much of the economy.