Long-term capital gains tax is a bad idea: Arora

Levying capital gains tax on those who invest in India, especially the foreign investors, is a bad idea, and is possibly the Central government's "biggest mistake," said Samir Arora, founder and chief investment officer of Helios Capital at the Business Standard Manthan Summit 2025.

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Capital gains tax, he added, is especially souring sentiment for foreign investors who have been on an unabated selling spree for five months. In the last couple of months alone, foreign institutional investors (FIIs) have dumped Indian equities worth over Rs 1 trillion.

"The biggest mistake they (the government) have made, the biggest souring of sentiment, and reality which they have to accept is capital gains tax in India, particularly the foreign investors, is 100 per cent wrong," Arora said.

Adding: "The largest investors in the world and in India are Foreign Sovereign Funds, Pension Funds, Universities, and the High Net worth Individuals (HNIs).

Taxing them on their gains, especially when they have no tax set-off available in their home country and when they face forex-related risks, is a big mistake that the government is making."