Foreign investors have net sold Indian equities worth around Rs 4.75 lakh crore since July 2024 when Finance Minister Nirmala Sitharaman announced an increase in capital gains tax. After her recent comments sparked hopes for a tax rejig among investors, analysts noted that such easing would result in FIIs finally making their much-awaited comeback, which in turn would be favourable for the wounded bulls on Dalal Street.
Following the 2024 General Elections, Finance Minister Nirmala Sitharaman in July announced an overhaul in the way India taxes profits made from the equity stock market. The tax on short-term capital gains (STCG), which essentially are profits booked within one year of purchase, was raised from 15% to 20%, while long-term capital gains tax on equities was increased from 10% to 12.5%.
