Shedding $1 billion a day: Gurmeet Chadha urges PMO, Finance Ministry to revisit capital features tax, STT
In a put up addressed to PMO India and the Ministry of Finance, Chadha claimed that India is dropping almost $1 billion in international capital day by day. He famous that since July 2024, following hikes in capital features tax and STT, international outflows have cumulatively touched round $100 billion, making Indian markets much less engaging on the worldwide stage.
He cautioned that such tendencies might undermine India’s potential to draw long-term, affected person danger capital, which is important to funding the nation’s progress ambitions. In line with Chadha, the present tax regime dangers reversing the advantages of earlier structural reforms that had enhanced India’s attraction amongst world buyers.
Highlighting the federal government’s observe file of responsiveness, he pointed to previous cases the place suggestions on taxation throughout Items and Providers Tax (GST) and revenue tax led to course corrections and aid measures. He urged policymakers to as soon as once more take a relook on the present framework to revive investor confidence and stem capital outflows.
“Honourable @PMOIndia and @FinMinIndia… We’re dropping international capital of just about $1 billion a day. Since July 2024, put up hike in capital features tax and STT, we have now misplaced $100 billion and our markets have change into globally unattractive. We want affected person danger capital to fund our progress story. It’s undoing the great work completed by way of varied reforms. A responsive authorities like yours has at all times taken suggestions on taxation, GST, revenue tax and given aid,” Chadha’s tweet mentioned.
The remarks come at a time when Indian fairness markets have been grappling with persistent international institutional investor (FII) promoting, including stress to valuations and general sentiment.
Overseas institutional buyers (FIIs) have offered home equities price Rs 19,837 crore in simply two classes in April, extending the sell-off to Rs 1.51 lakh crore in 2026. In March, they offered shares price Rs 1,17,775 crore, whereas offloading Rs 35,962 crore price of shares in January. In a reversal of kinds, they ended up internet patrons at Rs 22,615 crore.Chadha usually feedback on inventory market-related developments and broader financial points, and the most recent put up comes on the again of latest securities transaction tax (STT) guidelines that got here into impact from April 1.
The federal government in its February Funds had introduced an increase in STT expenses on futures and choices (F&O) trades from April 1. The Union Funds 2026 elevated STT by 150% on futures and 50% on choices. The futures phase faces the steepest adjustment. STT will rise to 0.05% of notional turnover from 0.02%, a levy utilized to the total contract worth slightly than simply premiums paid.
The Full Circle Consultants Managing Accomplice and CIO has been demanding rationalisation in long-term capital features (LTCG) tax to 10% for the long run.
Presently, long-term capital features on listed fairness shares and items of mutual funds are exempt as much as Rs 1.25 lakh. This is applicable to securities held for 12 months or extra. In the meantime, promoting fairness shares inside one yr of holding incurs a short-term capital features (STCG) tax of 20%. It was 15% previous to July 23, 2024.
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