SBI Research Calls for Abolition of LTCG Tax on Equities to Boost Foreign Capital Inflows

SBI Research urges govt to scrap LTCG tax on equities to attract foreign investors

SBI Research has urged the government to scrap long-term capital gains (LTCG) tax on equities and extend holding periods to two or three years to attract foreign investment. The proposals come amid heavy FPI outflows and pressure on the Indian rupee.

SBI Research calls for abolition of LTCG tax on equities to boost foreign capital inflows

According to SBI Research, removing the long-term capital gains tax on equities could revitalize investment levels. The report emphasizes extending the holding period to two to three years as a strategy to boost investor morale. Faced with foreign portfolio outflows, the need for policy reforms is clear.

Rupee Recovery Needs Tax Reforms, Stronger Foreign Capital Inflows: SBI Research

Get latest articles and stories on Business at LatestLY. SBI Research has called for changes in equity taxation, greater clarity on tax rules for external commercial borrowings (ECBs) and faster repatriation of export proceeds to attract foreign capital inflows, saying the Reserve Bank of India's measures to support the rupee have limits. Business News | Rupee Recovery Needs Tax Reforms, Stronger Foreign Capital Inflows: SBI Research.

SBI economists call for scrapping LTCG tax on equities

SBI economists are advocating for the elimination of long-term capital gains tax to stimulate sustained investment in Indian equity markets. This proposal arises amid substantial foreign portfolio investor withdrawals exceeding Rs 3 lakh crore this year, prompting concerns. Furthermore, the lack of AI-focused stocks is contributing to these market exits.

SBI Research seeks LTCG tax abolition amid ₹3.04 lakh crore FPI outflows

SBI Research urges scrapping equity LTCG tax as FPIs withdraw ₹3.04 lakh crore in 2026, and seeks faster export proceeds repatriation and tax clarity.

Why Has SBI Research Called For Scrapping LTCG On Equities?

The measure seeks to stabilise volatile foreign capital flows in the equity segment and reduce the risk of sudden outflows that can put pressure on the rupee.