Share Market: If you invest in the stock market, there's some big news for you. The government is not eliminating the long-term capital gains tax on equities. Let's explain why this decision was made.

The government refused to give tax exemption in the stock market.

Share Market: For the past few days, there have been reports that the government will soon eliminate the LTCG tax on equities listed on the stock market. However, the government itself has now dismissed this news as completely false. Recently, a central government minister stated that the government is not planning to eliminate any taxes.

The central government made the disclosure.
In fact, on Monday, a central government minister clarified in the Lok Sabha that there is currently no plan to remove the long-term capital gains (LTCG) tax on listed shares. Minister of State for Finance Pankaj Chaudhary said that the government does not have any proposal under consideration to eliminate this tax for retail and domestic investors. The government reviews tax rules and capital gains tax rates every year during the budget, keeping in mind the country's economic situation.

Investors have demanded the tax be repealed.
Over the past few days, several investors and market experts have called for the removal of the LTCG tax. They argue that this tax discourages long-term investments and reduces investors' profits. Some have also demanded that domestic investors receive the same tax relief recently granted to some foreign portfolio investors (FPIs) investing in government bonds.

Why isn't the tax being removed?
It's worth noting that a major reason for the government not taking such action is the growing revenue generated from this tax. According to data shared in Parliament, the government's revenue from the LTCG tax on shares is projected to increase by approximately 78% to ₹1.29 lakh crore in 2025-26, compared to ₹72,249 crore the previous year. This clearly indicates that this tax is becoming an important source of government revenue. Therefore, the government would certainly not want to incur losses by removing this tax.