The proposal is aimed at making foreign capital flows into equities more stable and limiting the chances of abrupt withdrawals that could put pressure on the rupee. Foreign portfolio investors (FPIs) currently face a 12.5% LTCG tax on equity investments. The Union Budget 2026 retained this rate for listed shares and equity mutual funds, continuing the tax framework introduced as part of a major fiscal overhaul in 2024. The proposal is aimed at making foreign capital flows into equities more stable and limiting the chances of abrupt withdrawals that could put pressure on the rupee. Foreign portfolio investors (FPIs) currently face a 12.5% LTCG tax on equity investments. The Union Budget 2026 retained this rate for listed shares and equity mutual funds, continuing the tax framework introduced as part of a major fiscal overhaul in 2024.
