With Budget 2026 nearing, expectations of LTCG tax relief are raising hopes of better post-tax returns and stronger market participation.
With the Union Budget 2026 just days away, expectations are rising around possible changes to the long-term capital gains (LTCG) tax. Investors are hoping for a cut in the LTCG rate from 12.5% and a higher exemption limit beyond ₹1.25 lakh.
Market experts believe rationalising LTCG could revive sentiment at a time when equities are under pressure due to heavy FII selling, weak participation, and global uncertainties. Lower capital gains tax would improve post-tax returns, making Indian equities more attractive to both domestic and foreign investors.
Several analysts argue that the current “triple tax” structure LTCG, STT, and other levies has dampened participation. A rollback to the earlier 10% LTCG rate or a cut in STT could help reverse FII outflows, support the rupee, and lift market confidence.
If Finance Minister Nirmala Sitharaman announces relief measures in Budget 2026, it could act as a strong sentiment booster, encouraging broader market participation and fresh capital inflows.
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