Congress Raises Concerns Over Centres Economic Response and LIC Stake in SEBI-Scrutinized Firm

Congress General Secretary for Communications, Jairam Ramesh, has referenced various media reports indicating that the central government is deliberating an ordinance to amend the Income Tax Act. This potential amendment would eliminate the 12.5% long-term capital gains tax (LTCG) on investments made by Foreign Portfolio Investors (FPIs) in government securities.

If implemented, this change could significantly impact the investment landscape for FPIs in India, potentially encouraging more foreign investment in government bonds. This comes amid ongoing discussions about taxation policies and their effects on foreign investments in the country.

The long-term capital gains tax was originally introduced to stabilize the equity market and ensure that gains made from long-term investments are taxed at a reasonable rate. However, the government’s consideration of this ordinance suggests a shift in strategy, possibly aimed at boosting foreign investments and enhancing liquidity in the market.

Further developments regarding this proposal will be monitored as the government continues to navigate the complexities of economic growth and investor confidence in the Indian market.