Why LTCG tax is back in focus: What the 12.5% rate and ₹1.25 lakh exemption mean for investors

Long-term capital gains (LTCG) tax is back in focus after SBI Research reportedly recommended scrapping the tax on equity investments, arguing that the move could help attract foreign capital and encourage longer-term investment. Currently, the tax on long-term capital gains is set at 12.5%. Additionally, there is an exemption of ₹1.25 lakh on eligible equity gains, a change introduced by Finance Minister Nirmala Sitharaman in the latest budget. Investors are closely watching these developments as they impact overall returns and portfolio strategy. Beyond equity, property taxation rules and other capital asset regulations remain critical components for individual investors. The debate continues as market analysts weigh the benefits of tax simplification against government revenue requirements.