Exemption causes revenue loss of Rs 49,000 crore

Last year when Prime Minister (PM) Narendra Modi made a statement to the effect that the tax concessions for investors in the capital markets were used mainly by the rich, there were apprehensions around the Budget exercise about the continuity of long-term capital gains (LTCG) tax exemption for equities. The finance minister, however, spared taxpayers by not tinkering with it.
 
India’s tax regime for the capital markets is one of the most liberal. With India also ranking very low among G-20 countries on tax collection, it is believed doing away with the long-term exemption could work in the government’s