India is considering changes to equity long-term capital gains (LTCG) taxation, including potential rate cuts and adjustments to how foreign portfolio investors (FPIs) compute gains, with broker Jefferies arguing this could revive foreign flows and support the rupee. Multiple outlets report that no decision has been announced yet and that policy options are being discussed as part of a broader effort to make equity taxation more competitive.
Jefferies says the government could choose from approaches such as an across-the-board LTCG cut, an FPI-specific LTCG cut, or changing the gains computation for FPIs to use US dollar terms. The brokerage links the discussion to India’s recent foreign investor selling and notes that equity-related exits have been large in recent fiscal periods, while tax relief in Indian government securities has supported debt inflows. Some outlets also note the government is weighing any revenue loss against fiscal constraints and the objective of converging taxation across asset classes.
Other reporting points to a possible review ahead of Budget 2027, citing consultations among officials and stakeholders, including SEBI and CBDT. It adds that LTCG is taxed at 12.5% without indexation benefits currently, and that thresholds and conditions differ between listed and unlisted shares, while dollar-based computation is under consideration.
