SEBI recommends ending LTCG tax for foreign investors, easing mutual-fund switches

SEBI recommends ending LTCG tax for foreign investors, easing mutual-fund switches

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India's securities regulator, the Securities and Exchange Board of India (SEBI), submitted non-binding recommendations to abolish the 12. 5% long-term capital gains (LTCG) tax on foreign equity holdings and to exempt domestic mutual-fund investors from LTCG tax when switching schemes, pending government approval ahead of the 2027 budget.

The proposal follows earlier government deliberations about cutting the same tax to spur equity market participation, as reported by the Indian Express. Jefferies warned that a reduction could attract foreign portfolio inflows, while analysts cited by Finshots argued that the tax is not the primary cause of recent foreign outflows.

Actors

Indian government senior government official Finance Minister Nirmala Sitharaman SBI Group Chief Economic Adviser Soumya Kanti Ghosh State Bank of India

Locations

India Mumbai, India

Articles

November 02, 2026
4 total
SEBI proposes eliminating LTCG tax for foreign investors and easing rules for mutual-fund scheme switches
SEBI proposes eliminating LTCG tax for foreign investors and easing rules for mutual-fund scheme switches

Livemint • 02 Nov 13:31

The Securities and Exchange Board of India has submitted non-binding recommendations to remove the 12.5% long-term capital gains tax on foreign equity holdings and to exempt domestic mutual-fund investors from LTCG tax when switching schemes, pending government approval ahead of the 2027 budget.

Credibility 78% Manip. 8% Center
Sebi recommends ending LTCG tax for foreign investors and easing rules for mutual-fund switches
Sebi recommends ending LTCG tax for foreign investors and easing rules for mutual-fund switches

Business Standard • 02 Nov 08:46

India's securities regulator has suggested scrapping long-term capital gains tax on foreign portfolio investors and allowing domestic mutual-fund investors to switch schemes without tax, pending government approval.

Credibility 82% Manip. 8% Center
SEBI proposes eliminating long-term capital gains tax for foreign investors and easing rules for domestic mutual-fund switches
SEBI proposes eliminating long-term capital gains tax for foreign investors and easing rules for domestic mutual-fund switches

Moneycontrol.com • 02 Nov 06:44

The Securities and Exchange Board of India (SEBI) has recommended scrapping long-term capital gains tax on equity investments by foreign investors and allowing domestic mutual-fund investors to avoid the tax when selling holdings to purchase new ones.

Credibility 52% Manip. 8% Center
SEBI urges government to scrap long-term capital gains tax for foreign investors and ease rules for domestic mutual fund switches
SEBI urges government to scrap long-term capital gains tax for foreign investors and ease rules for domestic mutual fund switches

Moneycontrol.com • 02 Nov 06:44

The Securities and Exchange Board of India has recommended eliminating the 12.5% long-term capital gains tax on foreign investors and allowing tax-free switches between domestic mutual fund schemes held for over a year, ahead of the upcoming budget.

Credibility 68% Manip. 8% Center
October 30, 2026
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Debate Over Cutting Long-Term Capital Gains Tax Fails to Explain Foreign Outflows from Indian Equities
Debate Over Cutting Long-Term Capital Gains Tax Fails to Explain Foreign Outflows from Indian Equities

Finshots • 30 Oct 01:32

Analysts argue that high long-term capital gains tax is not the main driver of foreign investors pulling money from Indian stocks, and reducing the tax may not reverse the trend.

Credibility 72% Manip. 9% Center
October 29, 2026
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Jefferies says LTCG tax cut could lure foreign investors back to Indian equities
Jefferies says LTCG tax cut could lure foreign investors back to Indian equities

The Economic Times • 29 Oct 04:32

Jefferies warns that a reduction in India's long-term capital gains tax may revive foreign portfolio inflows, with banks, Reliance Industries and other large-caps likely to benefit the most.

Credibility 72% Manip. 9% Center
October 26, 2026
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India's 2027 Budget May Consider Reducing Long-Term Capital Gains Tax to Boost Stock Market
India's 2027 Budget May Consider Reducing Long-Term Capital Gains Tax to Boost Stock Market

The Indian Express • 26 Oct 05:06

The government is weighing options, including a possible cut to the 12.5% long-term capital gains tax, as it seeks to revive equity market participation amid weak returns and low wage growth.

Credibility 72% Manip. 9% Center

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