Nirmala Sitharaman Opens Review of Equity Taxes for 2027 Budget

Finance Minister Nirmala Sitharaman announced that the Indian government is open to hearing views on removing the long-term capital gains (LTCG) tax and revising the securities transaction tax (STT) during consultations for the Union Budget 2027-28. Speaking at the Bloomberg New Economy Forum in New Delhi, Sitharaman acknowledged that domestic and foreign investors have raised concerns regarding equity taxation and the need for similar treatment across different asset classes.

Sitharaman stated that the objective of aligning tax treatment is to bring asset classes to par rather than increasing the overall tax burden. These comments follow a period of significant foreign portfolio investor outflows, which totaled Rs 3,07,719 crore in 2026. The move aligns with recommendations from SBI Research to abolish the LTCG tax on equities to stabilize short-term money flows.

Beyond taxation, Sitharaman addressed the volatility of the rupee against the US dollar, noting that the Reserve Bank of India will focus on containing volatility instead of targeting a fixed exchange rate. She also emphasized India's strategic efforts to attract capital for renewable energy, artificial intelligence, and semiconductors to maintain economic momentum.