FPI lobby seeks scrapping of LTCG tax, say it makes market uncompetitive

One of the key demands of the broking community is a cut in the domestic distribution tax and securities transaction tax

An association of foreign portfolio investors (FPIs) has sought the scrapping of tax on long-term capital gains (LTCG), saying it makes the Indian markets uncompetitive and hurts inflows.

In a letter to Finance Min­ister Nirmala Sitha­raman, Asset Mana­gement Roundtable of India (AMRI), a lobby group, said the tax on LTCG distorted the investment climate for India. It has also created several operational challenges, which are dissuading genuine foreign investors, especially institutional investors, from investing in India, they said in the letter. 

“To mitigate any friction on account of taxation, we recommend that the government should revert to the earlier regime of exempting