Several industry bodies have urged the Ministry of Finance to rationalise long-term capital gains (LTCG) tax on equities and reduce securities transaction tax (STT) in the upcoming Union Budget 2027.<\/p>\n
Officials in the Finance Ministry, including Finance Minister Nirmala Sitharaman and Revenue Secretary Arvind Shrivastava, have been holding pre-Budget consultative meetings with the main industry bodies such as the Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), and the PHD Chamber of Commerce and Industry (PHDCCI).<\/p>\n
One of the most-cited requests from the industry was to rationalise LTCG tax on equities, particularly in view of the tax concessions extended to certain debt instruments. However, several other tax proposals related to the capital market also feature in the recommendations.<\/p>\n
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<\/div>\n<\/div>\n<\/div>\nThe PHDCCI, for example, has requested that the government abolish LTCG tax on equity investments, reduce the short-term capital gains (STCG) tax rate from 20% to 10%, and lower STT rates \u201cto encourage long-term investment and improve India\u2019s capital market competitiveness\u201d.<\/p>\n
In its representation to Ms. Sitharaman, FICCI highlighted the fact that foreign portfolio investors (FPIs) have withdrawn about \u20b93.08 lakh crore during the year. It added that capital gains tax, which is charged over and above STT, erodes returns from equities, and needs a review to make India a more attractive place to invest.<\/p>\n
Budget 2027 will be presented against the backdrop of the ongoing West Asia crisis, rising inflation, and fiscal pressure on the government. In this, India\u2019s micro, small, and medium enterprises (MSMEs) need help, the industry bodies have argued.<\/p>\n
Towards this, PHDCCI has requested the Finance Minister to extend the overdue period for classifying a loan as a non-performing asset (NPA) from the existing 90 days to 180 days. The move, it argued, would \u201caccommodate longer working capital cycles and delayed realisation of receivables\u201d.<\/p>\n
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<\/div>\n<\/div>\n<\/div>\nFurther, the chamber has called for an enhancement of PM MUDRA loan limits and a Budget announcement of direct equity support to MSMEs through the Fund of Funds Scheme, \u201cwith dedicated allocations for start-up seed capital and SME IPO participation.<\/p>\n<\/div>\n