New Delhi, Nov. 9 -- India once had no long-term capital gains (LTCG) tax on equities. Back in 2004, then finance minister P. Chidambaram abolished the LTCG tax on securities transactions altogether. After a pause of 14 long years, it was reintroduced in 2018 by then finance minister Arun Jaitley, who argued that the 'return on investment in equity is already quite attractive' and there's a strong case for bringing long-term capital gains from listed equities into the tax net. Since then, the levy has gone through various changes.

Presently, long-term gains from equities, mutual funds, property, and gold exceeding Rs.1.25 lakh in a year are taxed at 12.5%. Indexation benefit no longer exists. On the other hand, short-term capital gains a...