NitinR

In my opinion, one of the best ways to improve the current situation would be to reduce LTCG on equities to 0% and bring STCG down to around 10%. The logic is simple. If markets continue to underperform and investors don't make meaningful returns, the government isn't going to collect any capital gains tax anyway. At the same time, after years of weak returns, many investors are questioning whether it is worth staying invested in equities at all. This is where taxation can make a difference. Reduce LTCG to zero and STCG to 10%, and you give people a stronger reason to participate in the cash market again. Participation can increase, turnover can increase and, as a result, STT collections can increase as well. Today, the approach seems to be to increase taxes at every level, capital gains taxes on profits and transaction taxes whenever you trade. But there is a limit to how much you can squeeze participation. If investors stop making money, capital gains tax collections fall automatically to zero. And if participation itself falls, eventually STT collections can suffer too. So the question should not just be: What tax rate can we charge? It should be: What tax structure maximises participation, investment and ultimately sustainable tax collections? For investors who stayed invested through years of underperformance, lower capital gains taxes would also reward patience rather than penalise whatever returns they eventually make. Sometimes, reducing the tax rate can actually broaden the market, increase activity and create a much healthier tax base over the long term.