LTCG

As the Union Budget 2026 approaches, investors are buzzing about potential cuts to the Long-Term Capital Gains (LTCG) tax. Experts believe that easing taxes could enhance post-tax returns and attract more market participants.

FPIs have net sold ₹33,598 crore worth of Indian stocks in January so far, the highest monthly outflows since August 2025. Last year, the FPI selloff hit ₹166,286 crore as foreign investors remained net sellers in eight out of 12 months of 2025.

Ahead of the Union Budget, the debate on Long-Term Capital Gains tax intensifies. Critics argue it hinders long-term investments, reduces post-tax returns, and promotes double taxation. The effective tax rate for high earners may drive talent abroad, threatening India's economic competitiveness.

Budget 2026: Tax experts urge the govt to expand the scope of Section 87A rebate and increase the threshold of long-term capital gains tax to provide greater relief to the middle class. Here's how the ₹1.25 lakh LTCG tax limit and exclusion from 87A rebate affect salaried mutual fund investors.

Exemption under section 54F is available only if the sale proceeds from the sale of the long-term capital asset are reinvested in a residential property.

Since both equity and commodity markets undergo cycles, analysts are now of the view that equities will make a comeback in 2026.

NRIs can claim capital gains exemption on reinvestment of share sale proceeds if certain conditions under the Income-tax Act are met.