FICCI Proposes Exemption from Long-Term Capital Gains Tax for Shares

The Federation of Indian Chambers of Commerce and Industry (FICCI) has formally requested an exemption from the long-term capital gains (LTCG) tax on listed shares. This proposal aims to boost investment in publicly traded companies and foster economic growth.

FICCI's recommendation comes in light of ongoing concerns about taxation policies that may deter investors in the stock market. The advocacy group argues that the existing LTCG tax, which applies to gains realised on shares held for over one year, could be discouraging for potential investors.

In its submission, FICCI highlighted the need for a more investor-friendly climate to stimulate capital inflow. They posited that removing this tax would enhance liquidity in the market and encourage more individuals to participate in equity investments.

The call for removal of the LTCG tax aligns with wider discussions on taxation and investment strategies, aiming to create a conducive environment for both domestic and foreign investors. The FICCI believes that such measures could yield significant long-term benefits for the Indian economy, as more investments could lead to stronger market performance and job creation.

As discussions continue, FICCI's stance will likely be considered by policymakers as they evaluate the impact of various tax laws on investment behaviour in India. The results of this engagement could influence future legislative changes and shape the Indian investment landscape more broadly.