PHDCCI, an industry body, wants the Centre to scrap long-term capital gains tax on equity. It also wants short-term tax cut to 10% and easier MSME loans, as reported by Free Press Journal.
This is only a request for Union Budget 2027-28. Nothing has changed yet. Today's tax rules still apply to your shares, and the Budget will decide what happens.
Key takeaways
- PHDCCI has asked for zero long-term capital gains (LTCG) tax on equity.
- It also wants short-term capital gains (STCG) tax cut to 10%.
- The body has asked for easier loans for small businesses (MSMEs).
- These are Budget requests, not decisions, so your tax today is unchanged.
- Check your own numbers before you buy or sell anything.
How capital gains tax works in simple terms
A capital gain is the profit you make when you sell a share for more than you paid. The tax depends on how long you held it.
If you sell listed shares within 12 months, it's a short-term gain. Under current rules, that's taxed at 20%. If you hold longer than 12 months, it's a long-term gain. Long-term gains are taxed at 12.5%, but only on profit above ₹1.25 lakh in a year.
Cess of 4% is added on top of these rates. We've left it out of the examples below to keep the math simple.
What could change for investors
Say you sell shares after two years and make a ₹3,00,000 profit. The first ₹1,25,000 is free of tax. The remaining ₹1,75,000 is taxed at 12.5%, which is about ₹21,875. If LTCG were scrapped, you'd pay nothing.
Short-term gains would also get cheaper. Here's what a ₹1,00,000 short-term profit would cost you.
| Short-term profit | Tax at 20% (now) | Tax at 10% (ask) | You'd save |
|---|---|---|---|
| ₹50,000 | ₹10,000 | ₹5,000 | ₹5,000 |
| ₹1,00,000 | ₹20,000 | ₹10,000 | ₹10,000 |
| ₹2,00,000 | ₹40,000 | ₹20,000 | ₹20,000 |
These numbers are only for comparison. Nothing here is approved.
What the MSME loan ask means
MSME stands for micro, small and medium enterprises. These are the shops, workshops and small factories that employ many Indians. The report says PHDCCI wants loans to be easier for them.
We don't know the exact steps it suggests. Easier credit could mean faster approvals, less paperwork or more loans without collateral. Government schemes like CGTMSE already offer guarantee cover for some collateral-free business loans.
If you run a small business, keep your records tidy. Lenders look at your sales, bank statements and repayment history. You can try our eligibility check to see where you stand.
Who is affected
Share investors and traders would feel the tax changes most. Long-term investors would keep more profit. Active traders would gain from the lower short-term rate.
Small business owners would care about the loan ask. Savers who use fixed deposits would see little change. You can compare deposit and loan rates on our interest rates page.
What to do now
You don't need to act today. A few simple steps can help you stay ready.
- Note which of your shares you've held for more than 12 months.
- Keep your buy and sell records in one place.
- Don't rush to sell or buy because of a Budget wish list.
- If you plan a business loan, check your EMI with our EMI calculator.
- Follow the news hub for the final Budget announcements.
Frequently asked questions
Has the government agreed to scrap LTCG tax on equity?
No. According to reporting by Free Press Journal, PHDCCI has only asked for it. The Union Budget will decide.
What are the current tax rates on share profits?
Short-term gains on listed shares are taxed at 20%. Long-term gains are taxed at 12.5% above ₹1.25 lakh a year. Cess is extra.
Should I sell my shares before the Budget?
Not because of this news. A request isn't a rule, and selling early could cost you more tax. Think about your own goals first.
BankCreds analysis
Don't change your plans yet
This is a wish list, not a decision. Industry bodies send many Budget requests every year. Only some get accepted, and often in a smaller form.
Here's who gains most if it happens. An investor selling shares after a year with a ₹3 lakh gain pays about ₹21,875 tax today, before cess. That would drop to zero. A trader with a ₹1 lakh short-term gain would save ₹10,000.
Most salaried savers would notice little. Their money sits in fixed deposits, PPF or EPF, which this ask doesn't touch.
The MSME part may matter more for small business owners. But easier credit usually means clearer bank rules and guarantees, not lower interest. Don't sell or buy shares just because of this headline. Wait for the Budget speech and the fine print.
This section is BankCreds' own assessment of what the development means for Indian borrowers and savers. It is independent commentary, not part of the source reporting above.
Sources & references
- Free Press Journal — originating report https://www.freepressjournal.in/business/union-budget-2027-28-phdcci-urges-centre-to-scrap-ltcg-tax-on-equity-cut-stcg-tax-to-10-and-ease-msme-loan-norms
- SEBI — stock market regulator, for equity investing rules https://www.sebi.gov.in/
- CGTMSE — credit guarantee scheme for collateral-free MSME loans https://www.cgtmse.in/
Source links are shown as plain text, not clickable links. Copy a URL into your browser to read the original report.
Editorial note & disclaimer
How this was reported. The development above is attributed to the source or sources listed. BankCreds does not independently verify a third party's reporting; where a figure or a regulatory position is stated as fact, it is either attributed or drawn from the regulator's own published material. Everything under "BankCreds analysis" is our own assessment.
Rates and figures. Interest rates, per-gram values and premium bands quoted here are indicative, move daily, and differ by borrower profile, city and lender policy. Confirm the final number with the institution before you act on it — the sanction letter or policy schedule governs, not a news report.
Not financial advice. This article is general information for an Indian audience. It is not investment, tax, credit or insurance advice, takes no account of your circumstances, and BankCreds is not a lender, broker, distributor or advisor. Consider speaking to a SEBI-registered investment adviser or a qualified professional before acting.
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