Can a capital gains tax cut boost your SIP returns? | Pocket Money

Finance Minister Nirmala Sitaraman has blamed the mass exit of foreign investors from Indian stocks on “ease of liquidity, ease of availability” – presumably referring to the money pouring into the markets from domestic retail investors.Secondly, on the question of tax cuts on capital gains, while remaining noncommittal, she has said that it’s a “healthy debate to have”, sparking a growing climate of anticipation around possible cuts in Long-Term Capital Gains (LTCG) tax (which is currently 12.5%) in the forthcoming Budget.The OPM-wallahs, however, seem convinced that reducing, or abolishing, the Long-Term Capital Gains tax of 12.5% is the silver bullet that could bring back foreign portfolio investors, and revive Indian stocks.However, are taxes the main reason foreign portfolio investors have been exiting Indian stocks? What if lowering capital gains tax has the opposite effect – of encouraging them to sell more? What are the chances that tax cuts would revive your SIP returns? Vivek Kaul has some answers.Host: G Sampath, Podcasts Editor, The HinduProducer and editor: Jude Francis WestonDo write to us with your personal queries at pocketmoney@thehindu.co.in Published - October 30, 2026 04:56 pm IST