SBI Research Calls For Scrapping LTCG Tax On Equities Amid ₹3.04 Lakh Crore FPI Outflows In 2026
Mumbai, October 12, 2026: Amid heavy outflows, economists at the country's largest lender, SBI, on Monday called for abolishing the long-term capital gains (LTCG) tax on equities, which can help ensure such investors stay invested longer. Call for abolishing LTCG tax "The government must seriously look into anchoring hot money flows into equity segment by extending the holding period to say 2-3…
Mumbai, October 12, 2026: SBI Research has urged the government to abolish the long-term capital gains (LTCG) tax on equities to stabilize foreign portfolio investments (FPI) in the Indian market. As of October 2026, foreign investors had withdrawn Rs 3.04 lakh crore from Indian equities, marking a significant rise in outflows compared to the previous year.
The LTCG tax rate currently stands at 12.5 per cent on equity investments. To counteract the risk of sudden outflows that could destabilize the rupee, SBI Research proposes extending the holding period for foreign investors to 2-3 years without imposing the LTCG tax. This move aims to encourage long-term investment and enhance the stability of India's external accounts.
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- SBI Research calls for scrapping LTCG tax on equities amid record FPI outflows thehindubusinessline.com
