Angel One, CDSL, Motilal Oswal Shares Rally Up To 7% As Sitharaman Signals Openness To LTCG Tax Review

Capital market stocks surged roughly 7% on Tuesday as Finance Minister Nirmala Sitharaman acknowledged investor worries about India's equity tax system. The comments generated optimism about a potential review of long-term capital gains (LTCG) tax, which drove market-linked shares higher. The Nifty Capital Markets index jumped more than 3%, with every one of its 17 components posting gains.

Angel One led the rally, jumping 7%, followed by Motilal Oswal Financial Services, which climbed 6%. Central Depository Services (India) Ltd (CDSL) saw a 5.4% increase, while Computer Age Management Services rose 4.64%. Shares of brokerages Groww, BSE, Nuvama Wealth Management, and Multi Commodity Exchange of India (MCX) climbed between 1% and 3%.

The broad-based rally came after Sitharaman's remarks suggesting the government is open to market feedback on current equity taxes. Earlier reports indicated changes to the LTCG tax structure might be considered in the coming weeks, possibly before the Union Budget. Such a review could impact both domestic and foreign investors.

When asked whether the upcoming Union Budget could introduce more favorable tax treatment for overseas investors, Sitharaman did not announce any specific changes. She acknowledged that investment conditions had evolved and that concerns surrounding equity taxation had increased. Presently, gains from listed equities held for the qualifying long-term period attract a 12.5% LTCG tax, without indexation benefits.

The exemption threshold for eligible listed equity investments is Rs1.25 lakh annually. Retail investors do not receive the same benefit. Market observers are now monitoring for additional government signals on potential tax reforms, but no formal decision to alter LTCG rates or exemption limits has been made.