The government has said that there is currently no proposal under consideration to change capital gains tax rates, providing clarity amid speculation over possible revisions to the taxation framework.
Replying to a query in Parliament, the Finance Ministry said tax policies, including capital gains tax rates, are reviewed periodically as part of the annual Budget process and legislative revisions, taking into account prevailing macroeconomic conditions. However, as of now, no proposal to alter capital gains tax rates is under consideration.
The government also revealed that revenue generated from Long Term Capital Gains (LTCG) tax on equity transactions surged sharply in Assessment Year (AY) 2025-26, reflecting higher market activity and increased tax collections.
Revenue from LTCG tax on equity transactions stood at Rs 1,29,158 crore in AY 2025-26 (relevant to FY2024-25), compared with Rs 72,249 crore in AY 2024-25 (relevant to FY2023-24), marking a nearly 79% increase year-on-year.
The government noted that data for AY2026-27 and AY2027-28 is not yet available, as income tax returns for the corresponding financial years are yet to be filed.
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The Finance Ministry further clarified that the 12.5% LTCG tax rate on equity investments applicable to domestic and retail investors is also applicable to Foreign Portfolio Investors (FPIs) for investments in equities.
However, through the Income-tax (Amendment) Ordinance, 2026, the government has rationalised the tax treatment for FPIs investing in Government Securities (G-Secs). Effective April 1, 2026, interest income and capital gains arising from such investments have been exempted from income tax.
According to the government, the move aims to make India's tax regime more competitive and align the taxation of Government Securities with several comparable global jurisdictions. It expects the exemption to encourage stable, long-term foreign capital inflows, particularly from pension funds, insurance companies and sovereign wealth funds.
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