Budget 2026: Market players want tax relief on equity investments
What's the story
Ahead of the Union Budget for 2026-27, market participants are demanding a reduction in capital market taxation. The demand includes raising the exemption limit on long-term capital gains (LTCG) from equity investments. Stakeholders also want the government to refrain from increasing transaction taxes any further. The Union Budget will be presented by Finance Minister Nirmala Sitharaman on February 1.
Proposal
JM Financial Services proposes higher LTCG exemption limit
In its budget wishlist, JM Financial Services has suggested that the government raise the tax-free exemption limit for equity LTCG from ₹1.25 lakh to ₹2 lakh. The firm also wants a uniform definition of "long term" at 12 months for all asset classes such as equity, debt, gold and real estate. This is aimed at reducing complexity and improving tax clarity.
Tax concerns
Market participants caution against transaction-related tax hikes
Market participants have also warned against any further hike in transaction-related taxes. Dhiraj Relli, MD and CEO of HDFC Securities, said stakeholders have proposed keeping the Securities Transaction Tax (STT) on cash equity trades lower than that on derivatives. This is to promote long-term investing over speculative trading. He also suggested taxing only the profit component of stock buybacks and aligning dividend tax rates for domestic investors with those applicable to non-resident Indians (NRIs).
Tax advocacy
FYERS CEO advocates for lower capital gains tax
Tejas Khoday, the CEO of FYERS, has also spoken out against any further increase in STT. He believes that lowering both long-term and short-term capital gains tax to 10% would greatly boost retail investor participation. Khoday hopes that import duties on gold and silver won't be raised any further as these assets are key hedging instruments against equity market volatility and rupee depreciation.