India Willing to Discuss Capital Gains Tax Concerns, Says Finance Minister

Union finance minister Nirmala Sitharaman on Monday said the government is willing to listen to concerns raised by stock market investors regarding the taxation framework for Long-Term Capital Gains (LTCG) and Short-Term Capital Gains (STCG).

Speaking to reporters on the sidelines of the TEXPROCIL Export Awards event, Sitharaman said the Centre remains open to suggestions from stakeholders on the issue. “On this specific issue, and on any issue, we are always ready and willing to listen to the people. We will certainly take their inputs,” she said, as per news agency ANI.

Her remarks come amid growing discussions among market participants over the impact of capital gains taxation on investor sentiment and participation in equity markets. LTCG tax is levied on profits earned from investments held over a longer period, while STCG tax applies to gains made on assets sold within a shorter holding duration.

FM defends recent fuel price hikes

While addressing questions on the economy and fuel prices, Sitharaman defended the recent increase in petrol and diesel prices, saying the revisions were being carried out by oil marketing companies in response to soaring global crude prices. Petrol and diesel prices have been increased by nearly Rs 7.5 per litre in four instalments since mid-May.

“The increases now are coming from oil marketing companies (OMCs) because they are the ones procuring (raw material crude oil) and selling (finished product - fuel),” Sitharaman said. She added that the government had earlier absorbed significant pressure by reducing excise duties on fuel. “Had we not given that reduction at that time, a Rs 10 increase would have happened, which we absorbed, that is almost a Rs 1 lakh crore hit on the functional budget,” the minister said.

Earlier in the day, Sitharaman had stressed that “India cannot afford fearmongering” amid concerns linked to the ongoing West Asia crisis and rising energy prices.

Government monitoring oil prices, forex pressure

The finance minister said the government would continue to closely monitor global crude oil prices and their impact on India’s economy. “These increase in prices are not minor, all this will have to be paid through foreign exchange only. So, these are going to be challenges,” she said. She, however, expressed confidence that India would be able to manage the situation despite external pressures. Sitharaman also highlighted concerns around rising fertiliser prices, fuel costs and foreign exchange pressures, referring to them as the “three Fs” — fuel, fertiliser and forex.

RBI dividend, trade and textile sector discussed

Responding to a question on the Reserve Bank of India’s dividend payout to the government, Sitharaman said she trusted the RBI’s calculations and process. “A committee had looked into it, and based on that RBI does its annual calculation and gives the dividend to the government,” she said.

The minister also spoke about challenges facing exporters amid geopolitical tensions and changing global trade patterns. “Global retailers from H&M to Zara to Marks & Spencer are embedding sustainability requirements into their sourcing criteria,” she said. She added that Indian exporters would need to invest in technology, automation and sustainability to remain globally competitive.