The Centre has clarified that it is not considering any proposal to abolish the long-term capital gains (LTCG) tax on equity investments, putting to rest speculation over a possible rollback of the levy.
Replying to a question in the Lok Sabha on Monday, Minister of State for Finance Pankaj Chaudhary said the government currently has no plan to remove the tax on long-term gains from equity investments.
He, however, noted that tax rates and related policy measures, including those governing capital gains, are reviewed periodically during the Union Budget process and through legislative amendments, taking into account the prevailing economic environment.
The government’s response also highlighted the growing contribution of LTCG tax to the exchequer. Collections from long-term capital gains on equity transactions increased sharply over the past two financial years, totaling nearly ₹2.01 trillion during FY2023-24 and FY2024-25 combined.
According to the data shared in Parliament, the government collected ₹1.29 trillion in Assessment Year (AY) 2025-26, a substantial increase from ₹72,249 crore recorded in AY 2024-25. The Finance Ministry clarified that these figures are reported on an assessment-year basis, with AY 2025-26 reflecting income earned during FY2024-25 and AY 2024-25 corresponding to income generated in FY2023-24.
The ministry further stated that the 12.5% LTCG tax on gains from listed equity investments applies uniformly to both resident investors and Foreign Portfolio Investors (FPIs).
At the same time, the government introduced separate tax relief for FPIs investing in government securities. From April 1, 2026, such investors are exempt from income tax on both interest earned and capital gains arising from investments in Government Securities (G-Secs).
According to the government, the exemption is intended to bring India’s tax framework closer to international standards and make the domestic debt market more attractive for long-term global investors, including sovereign wealth funds, pension funds and insurance companies.