Stock Market Tax News: Industry chamber PHDCCI has urged the government to rationalise taxes on stock market trading, seeking the abolition of long-term capital gains (LTCG) tax and a reduction in short-term capital gains (STCG) tax from 20 per cent to 10 per cent.
According to sources speaking to ET NOW, the industry chamber has written to the government with a fresh proposal amid prevailing market conditions and record foreign portfolio investor (FPI) outflows.
The proposal seeks a more balanced taxation regime for equity market participants, with changes to capital gains taxes, the holding period for investments and securities transaction tax (STT).
PHDCCI seeks abolition of LTCG tax
The industry chamber has also suggested increasing the holding period for investments to 18–24 months, with the objective of ensuring that tax exemptions are available to genuine long-term investors.
The proposed changes would alter the taxation framework for equity investments if accepted by the government.
STCG tax cut from 20% to 10% proposed
Apart from seeking the abolition of LTCG tax, PHDCCI has urged the government to reduce STCG tax from the current 20 per cent to 10 per cent.
Alternatively, the chamber has suggested a reduction in securities transaction tax rates.
The recommendations are part of the industry’s broader demand for rationalisation of taxes applicable to stock market transactions.
Record FPI outflows prompt fresh tax proposals
The industry chamber’s recommendations come against the backdrop of record FPI outflows from Indian markets.
According to sources, PHDCCI has called for a balanced tax regime in view of prevailing market conditions.
The chamber has approached the government with its proposals, seeking changes to the taxation structure applicable to stock market investors.
Stock market tax proposals: Key demands
– LTCG tax: Abolition of long-term capital gains tax.
– STCG tax: Reduction from 20 per cent to 10 per cent.
– STT: Reduction in securities transaction tax rates as an alternative.
– Holding period: Increase to 18–24 months.
– Investor exemptions: Ensure benefits are available to genuine investors.
– Tax rationalisation: A balanced regime amid record FPI outflows.
Notably, these are recommendations made by the industry chamber, and no government decision on the proposed changes has been announced.