Will stock market investors get relief? Government’s big statement on removal of LTCG tax, situation clarified in Parliament Will stock market investors receive relief? The government issued a major statement on the removal of the LTCG tax, and the situation was clarified in Parliament. – ..

If you invest in the Indian stock market and were expecting relief from Long Term Capital Gains (LTCG) tax or its complete abolition in the upcoming budget or government announcements, then there is big news for you. The Central Government has officially clarified in the Parliament that at present there is no proposal under consideration of the Government to remove the LTCG tax applicable on equity investments in the stock market. After this written reply given by the Finance Ministry in the Lok Sabha, all those speculations in which tax exemption was expected have come to an end.

Minister of State for Finance Pankaj Choudhary clarified in Lok Sabha: There is no idea of ​​removing the tax right now.

Giving a written reply to a question asked in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said that at present there is no plan to abolish long term capital gains tax on equity investments. However, he added that the government keeps reviewing the tax laws every year during the preparation of the Union Budget and as and when required. This means that there is always scope for change depending on future economic conditions, but in the current situation investors are not going to get any direct relief from LTCG tax.

Government’s bumper earnings from LTCG tax: Revenue collected more than Rs 2 lakh crore

According to official data released by the government (government), a whopping total of Rs 2.01 lakh crore has been generated through LTCG tax on equity investments during the financial years 2023-24 and 2024-25. Statistics show that a huge increase of about 79 percent has been recorded in tax collection on annual basis. The government collected Rs 1.29 lakh crore as LTCG in Assessment Year (AY) 2025-26, which was Rs 72,249 crore in AY 2024-25. Due to such a huge revenue contribution, the government is not in favor of removing this tax at present.

Same 12.5% ​​tax rate for both retail and FPI: No discrimination in tax rules

The government also stressed that the LTCG tax rate of 12.5 per cent applicable on listed equity shares is the same for both domestic retail investors and foreign portfolio investors (FPIs). The government says that there is no discrimination between both types of investors in the tax system, so that transparency and fairness is maintained in the market.

Big change in G-Secs rules for foreign investors: New relaxation applicable from April 1, 2026

Even though there is no change in LTCG tax on equities, the government has relaxed the rules related to government bonds (G-Secs) for foreign investors (FPIs). According to the new provisions effective from April 1, 2026, foreign institutional investors investing in Indian government bonds have been given full exemption from income tax on both interest income and capital gains. The main objective of this move is to make the Indian tax system compatible with global standards and to attract pension funds and sovereign wealth funds from around the world towards the Indian market.