Helios Capital Founder Samir Arora has pushed back against comparisons between tax on interest income and tax on equity gains, calling the analogy flawed and incomplete. “That makes little sense,” Arora wrote in a post on X, explaining that debt products such as fixed deposits (FDs) and other interest-bearing instruments operate in a way that does not necessarily increase the government's overall tax take by much.
Here's what Samir Arora said:
That makes little sense.
— Samir Arora (@Iamsamirarora) January 28, 2026
Simply because when you buy debt/FD and report an interest income (and therefore pay tax on it) another party reports the same amount as interest cost (and therefore saves tax). So govt does not benefit much in aggregate on tax collection.
Futures… https://t.co/JS6rS6ie4Q
According to Arora, when an investor earns interest income and pays tax on it, the other side of that transaction usually records the same amount as an “interest cost,” which can reduce their taxable income. “Simply because when you buy debt/FD and report an interest income (and therefore pay tax on it) another party reports the same amount as interest cost (and therefore saves tax). So government does not benefit much in aggregate on tax collection,” he said.
Arora extended the same logic to futures trading, writing that profits and losses are generally mirrored across participants. “Futures trading is like above where someone reports a profit and there is more or less an equal amount of loss with some other participant,” he wrote, adding that this structure can justify a higher tax rate on the profitable side because the losing side gets a corresponding tax advantage. “Therefore tax rate can be high for the one who makes profit (and it already is) since the losing side is going to get tax benefit for the same amount,” he said.
Arora added long-term equity capital gains did not work in the same way, particularly in cash equities. He said this happened as the gains are not usually matched by an equivalent, claimable loss on the other side. “In case of long term equity what you exchange is post tax income of the company or dividend stream, which is anyway taxed separately,” he said.
He added that when one investor books large capital gains, it does not automatically mean another investor can claim an equal tax loss. “One investor making big capital gains is not normally accompanied by another fellow claiming an equal loss (the sellers may have had an opportunity loss but not a claimable tax loss),” Arora wrote.
Summing up his post, Arora said this is why equity gains can lead to a larger net tax collection for governments than is often assumed. “In summary: Governments worldwide collect a lot more on cash equity gains than what you see at first glance as there is no other side claiming a loss (and therefore a tax offset) to counter your profit,” he said.
Arora also flagged what he sees as an incomplete comparison when equity-related transaction costs are ignored. “Also capital gains tax cannot be compared with tax on interest income by conveniently leaving out STT,” he added, referring to the Securities Transaction Tax that applies to equity trades.
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