Nifty 500 revenue jumped 20% YoY in the April‑June quarter, while profit after tax surged 21%, sparking a chorus of calls from market strategists to slash STT and long‑term capital gains tax.
Despite robust underlying data, foreign portfolio outflows and a loss‑making arbitrage environment weigh on sentiment. Buying the Nifty today and selling in the future currently costs investors ₹15‑₹16 per ₹1000, a shift that favors high‑frequency traders.
Gurmeet Chadha, Managing Partner and CIO at Complete Circle, warned that the present tax regime, which taxes dividends and complicates buybacks, inflates supply pressure. He urged a return of the securities transaction tax to last year’s level and a cut in long‑term capital gains tax to rejuvenate sentiment.
Market participants are watching closely for any policy easing that could lift the index, with expectations that normalised arbitrage and reduced investment costs could add up to a 5% rally.
The Finance Ministry is slated to outline tax reforms in the upcoming budget, with the RBI and policymakers scheduled for a review early next year.