{
  "id": 17880497,
  "title": "How does India tax equity investors? A look at LTCG, STCG and STT",
  "url": "https://urgent.news/2026/11/02/how-does-india-tax-equity-investors-a-look-at-ltcg-stcg-and-stt",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-11-02T23:59:09.000Z",
  "source": {
    "name": "Hindu BusinessLine",
    "slug": "hindu-businessline",
    "url": "https://www.thehindubusinessline.com/markets/how-does-india-tax-equity-investors-a-look-at-ltcg-stcg-and-stt/article71659100.ece"
  },
  "original_language": "en",
  "account": "India's markets regulator, the Securities and Exchange Board of India, has recommended tax relief for both foreign and domestic investors in equity markets. The country's benchmark stock indexes, the BSE Sensex and NSE's Nifty 50, have been among Asia's weakest performers, with declines of 6.2% and 4.8% respectively over the past two years. This has prompted calls for reforms to enhance post-tax returns for investors.\n\nInvestors in India are taxed uniformly, with a 12.5% tax applied to gains from shares held for more than a year, and 20% tax for shares held for less than 12 months. Additionally, India imposes extra levies for various purposes, which can raise the effective tax rate to nearly 15% on long-term gains and almost 24% on short-term gains. Investors are also subject to the Securities Transaction Tax, which is levied on the value of each trade and varies depending on whether it pertains to cash equities or equity derivatives.\n\nForeign investors face a withholding tax of 20% on dividends from listed equities. The nation's benchmark Nifty 50 index has fallen 4.8% over the last two years, and even more sharply in 2026, setting the stage for its poorest annual performance in over a decade. This decline, coupled with the weakening Indian rupee, has led to foreign investors selling shares worth over $50 billion since 2025.\n\nTax decisions are typically made during the annual federal budget in February, though adjustments can be announced at any time. Finance Minister Nirmala Sitharaman recently acknowledged concerns from both domestic and foreign investors about the long-term capital gains tax and securities transaction tax. She expressed a willingness to hear views on the matter before the budget in early next year.\n\nSitharaman emphasized that sustaining 7% growth in India necessitates the availability of equity capital. While the government has not committed to reducing taxes, it has abolished long-term capital gains tax on listed equities for foreign investors investing in Indian debt. This move distinguishes India's treatment of foreign portfolio investors, as most major markets either exempt them from capital gains tax or allow gains to be taxed in their home jurisdictions.",
  "summary": "India’s equity market underperformance and heavy investor taxation have intensified calls for changes to the country’s capital gains tax structure.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "The Indian Express",
        "title": "‘Similar to cricket betting’: Amid India’s IPO booms, why investors need to watch out for grey markets",
        "url": "https://urgent.news/2026/11/03/similar-to-cricket-betting-amid-indias-ipo-booms-why-investors-need",
        "published": "2026-11-03T01:30:06.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}