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Sebi Backs Removal of LTCG Tax for Foreign Investors: Report

  • The Securities and Exchange Board of India recommended the government scrap the long-term capital gains tax for foreign investors to galvanize underachieving equity markets.
  • Foreign investors sold a record $31 billion in Indian stocks this year as the Nifty 50 index declined 4.8% over two years while the MSCI emerging market index rose 40%.
  • Investors currently pay 12.5% long-term capital gains tax and 20% on short-term gains; brokerage firm IIFL estimates removing these levies could improve foreign investor returns significantly.
  • SEBI also proposed that switching between domestic mutual fund schemes should not be treated as a taxable sale if units are held for more than one year.
  • These recommendations are not binding, with a final decision resting with the government ahead of the annual federal budget, following two years of SEBI consultation with foreign investors.
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EXCLUSIVE: India markets regulator backs removal of long-term capital gains tax for foreign investors, sources say

·London, United Kingdom
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Times of India broke the news in India on Monday, November 2, 2026.
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