India's Sitharaman says she will consider equity tax changes

India's Finance Minister Nirmala Sitharaman said on Monday she would consider investor concerns about the long-term capital gains tax, speaking at the Financial Express Leadership Awards in Mumbai. She said she appreciated and realised the sensitivity and anxiety among retail investors and equity participants.

Sitharaman said the tax structure was the same in 2023-24, when India saw its highest inflows, and that nothing differently was done for drawing investments. She said circumstances had changed, challenges had grown and more net foreign institutional outflows had happened, and that she would consider all of it.

She said she would not say more at this stage but recognised the voice seeking tax changes. She said India needs capital and equity to sustain economic growth of 7 per cent and above, and recognised the need for equity markets to get support similar to what debt markets receive.

The long-term capital gains tax is levied on profits from selling listed equity shares and equity mutual funds held for more than 12 months. Gains up to 1.25 lakh rupees a financial year are exempt, with gains above that taxed at a flat 12.5% plus surcharge and cess, without indexation benefit, according to Hindustan Times.