By 5paisa 05 Mar 2025
The debate over India’s long-term capital gains (LTCG) tax is intensifying. Experts urge the government to review the structure, not roll it back, to ease investor burden.
India is one of the few countries taxing foreign investors on stock market gains. Critics argue this discourages foreign capital and reduces India’s attractiveness.
HDFC’s Devarsh Vakil suggests extending the holding period for LTCG, possibly to 2-3 years, to reduce tax impact while maintaining revenue generation for the government.
Tax burdens and regulatory complexity hurt foreign investments, especially with double-taxation issues. This discourages hedge funds and reduces India's appeal for global investors.
Experts highlight that lowering LTCG could attract long-term capital, particularly from sovereign and pension funds. A favorable tax regime is essential for India’s growth.
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