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FM Open to Reviewing LTCG Tax Ahead of Budget 2027
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Ministry of Financetax

FM Open to Reviewing LTCG Tax Ahead of Budget 2027

October 14, 2026

Finance Minister Nirmala Sitharaman signals possible review of Long-Term Capital Gains tax in lead-up to Budget 2027, amid industry demands for rationalization.

Finance Minister Nirmala Sitharaman has indicated that the government is open to reviewing the Long-Term Capital Gains (LTCG) tax regime ahead of the Union Budget 2027. The statement comes amid sustained representations from investors, industry bodies, and tax professionals seeking rationalization of tax rates and indexation benefits.

Currently, LTCG on equity assets is taxed at 12.5% (without indexation) under Section 112A of the Income Tax Act, 1961, while gains on non-equity assets are taxed at 20% with indexation. Critics argue that inflation-adjusted gains are still taxed in many cases, eroding real returns.

While no specific proposals have been confirmed, the FM’s statement suggests potential recalibration may be under consideration. Practitioners should monitor policy developments closely, especially ahead of pre-Budget consultations. Any change could impact investment structuring, portfolio planning, and PE/VC exit strategies.

Citations

  • Income Tax Act, 1961, Section 112A
Practice Areas:tax

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