Abolish LTCG, rationalise STCG, STT rates on equities: PHDCCI to Finance Ministry

The PHDCCI, a prominent business chamber, has written to the Finance Ministry suggesting changes to India's capital gains tax structure. It recommends abolishing the Long Term Capital Gains tax and modifying the rates for Short Term Capital Gains tax on equities. This move aims to attract genuine investors by increasing the holding period for long-term investments. The current tax structure, which involves double taxation on equities, is seen as discouraging investment, leading to a decline in investment levels and foreign portfolio investor withdrawals.

Why it matters

Abolishing Long Term Capital Gains tax and modifying short-term capital gains taxes could attract more investors to the Indian stock market. This could lead to increased demand and higher stock prices.

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