Tax Trap or Economic Necessity? India's Capital Gains Dilemma Exposed

India's capital gains tax policy has sparked intense debate, with market veteran Samir Arora calling it the government's "biggest mistake." The recent hike in long-term capital gains (LTCG) tax from 10% to 12.5% has led to concerns about deterring foreign institutional investors (FIIs). Critics argue that the tax puts India at a disadvantage, potentially hindering market growth and foreign investment. FIIs have sold over ₹1 trillion in Indian equities in the past five months, signaling growing dissatisfaction. While some experts advocate for removing the tax to align with global standards, others argue that India's regime remains moderate compared to other nations.
Sources: Business Standard, Financial Express, Moneycontrol