Rs 5 lakh crore worth FII outflows since 2024 capital gains tax hike wreak havoc on Dalal Street. Is a reversal on the cards?

What happened: Finance Minister Nirmala Sitharaman said discussions on long-term capital gains tax and securities transaction tax are ongoing, after 2024 hikes raised STCG tax to 20% and LTCG tax to 12.5%. Key numbers: FIIs net sold Rs 2,774 crore from July to end 2024, Rs 1.66 lakh crore in 2025 and Rs 3.06 lakh crore in 2026 so far. One analyst cited potential $150 billion in FII and FDI flows over three years. Why it matters: Analysts said a capital gains tax cut could spark sharp FII inflows and ease pressure on Dalal Street, though any formal proposal is yet to be announced.

Finance Minister Nirmala Sitharaman said discussions on long-term capital gains tax and securities transaction tax are ongoing, after 2024 hikes raised STCG tax to 20% and LTCG tax to 12.5%.

Analysts said a capital gains tax cut could spark sharp FII inflows and ease pressure on Dalal Street, though any formal proposal is yet to be announced.