SEBI Recommends LTCG Tax Exemption For Foreign Investors: What It Means For Indian Markets

The Securities and Exchange Board of India (SEBI) has recommended removing long-term capital gains (LTCG) tax on foreign investors and proposed tax relief for domestic mutual fund investors. Through the move, regulator seeks to improve the attractiveness of Indian equity markets and encourage investment, according to a Reuters.

The recommendations have been made as part of SEBI's pre-budget representations to the government ahead of the Union Budget in February. The proposals are not binding, and the final decision rests with the government, the report said, citing two sources with direct knowledge of the matter.

SEBI has suggested that foreign investors be exempted from the 12.5 per cent LTCG tax currently applicable to equity investments held for more than one year. Investors holding equities for less than 12 months are subject to a 20 per cent short-term capital gains tax, in addition to securities transaction tax on trades and withholding taxes on dividends.

"The proposals are aimed at reducing the upfront tax burden on foreign investors," one of the sources told Reuters.

Mehul Koradia, Chief Strategy Officer, Mirae Asset Sharekhan said, "SEBI has recommended to government to scrap LTCG made by the foreign investors. If this happens Indian markets may become…

Original source: https://www.timesnownews.com/business-economy