Capital gains tax collections from Indian equities climbed, according to Dhruva Advisors’ chairman Dinesh Kanabar, as trading activity surged amid policy uncertainty.
Kanabar noted that the rise reflects heightened market volume, but warned that any move to reduce or eliminate capital gains tax would create a revenue shortfall that "cannot be revenue neutral", citing the STT alone would not fill the gap.
Foreign investors have flagged the impact of rupee depreciation on returns. KPMG India partner Sunil Badala urged the government to restore a foreign‑currency calculation provision, arguing that the earlier dollar‑based rule had helped buffer losses when the rupee weakens.
Tax certainty is a priority for sovereign and pension funds, some of whom are exempt from home‑country taxes, making India’s capital gains tax an extra cost. The next steps will hinge on how the Ministry of Finance weighs revenue implications against potential inflows, with the next Union Budget slated for February 2026.
Until any changes are announced, market sentiment remains cautious; the Nifty 50 has traded within a 0.4% range since the latest data release, and traders are keeping a close eye on the budget for signs of a more investor‑friendly framework.