No plan to remove long-term capital gains tax; markets have rewarded long-term investments: MoS for finance

The government has no plan for now to abolish the long-term capital gains tax and that the Indian stock markets have “consistently performed positively for long term investments”, minister of state for finance Pankaj Chaudhary told the Rajya Sabha on Tuesday.

Chaudhary was responding to a question on whether the government would abolish the long-term capital gains tax “to restore the sentiments of the market and to arrest the free fall of the market”.

He, however, added that the Budget for 2024-25 had introduced significant changes to rationalise and simplify the long-term capital gains tax regime. These included the rationalisation of holding periods and rates of taxation for financial and non-financial capital assets.


In a written reply, Chaudhary said despite the latest fall, the Indian stock markets have consistently rewarded long-term investments. The benchmark NIFTY-50 index has yielded an 11.13% return on a compounded annual growth rate basis since its inception in 1996, he said.

He said benchmark indices--NSE NIFTY-50 and BSE Sensex--showed a consistent upward trend until September 2024, scaling new highs. This has, however, started moderating since October 2024. The market capitalization of all companies listed on the NSE and the BSE has dropped by around Rs 74 lakh crore between October 1, 2024, and March 18, 2025, he said.

Between October 1, 2024, and March 25, the Sensex has dropped to 78,017 points from 84,266 points.

The minister said stock market movements are a function of investor perceptions along with factors, including global economic scenarios. Geo-political uncertainties affecting foreign capital flows, domestic macro-economic parameters and overall corporate performance are among the economic conditions that impact stock market performances.