'Capital gains in Sweden is 30%, but...': Finance expert makes case for 0% LTCG tax in India

Finance expert Akshat Shrivastava has strongly opposed any increase in India's capital gains tax, arguing that the tax should instead be eliminated. Amid market volatility and concerns over investor returns, he highlighted how India's tax policies fail to account for the financial burdens of its citizens.

“Capital gains in Sweden is 30%. But, in India, it is much lower. Should we increase our capital gains? Absolutely NOT. In fact, we should make it 0%,” Shrivastava wrote, outlining key reasons for his stance. He pointed out that unlike countries with strong social security systems, Indians must plan for their retirement and job losses on their own. “If you lose a job—in 6 months, you can come on road. In countries like Sweden, you have massive social security.”

Shrivastava also criticised how taxpayers in India receive little in return despite bearing high costs for essential services. "People paying direct income tax (a large chunk) do NOT avail government benefits. They put their own generators, live in societies with proper roads (pay high maintenance). They do not avail government hospital help or send kids to government schools. All these costs add up for them. What’s the benefit for them at the end? Nothing.”

For many, he argued, investing is the only way to secure their future. “For all these hardworking folks: their only hope for retirement (avoiding stressful work) is that they invest their money well (and pay low taxes on gains). When you have to fund your own survival, the taxes charged should be low.” He called for India to experiment with a 0% tax on capital gains. “When we are experimenting so much with our economy, how about a 0% tax experiment on capital gains?”

His remarks come amid a major market slump. Since September 26, 2024, the benchmark BSE Sensex has seen nearly ₹25 lakh crore wiped out, while the overall market capitalisation of BSE-listed firms has retreated by ₹92 lakh crore. Heavy selling by foreign institutional investors (FIIs), rising US bond yields, a weakening rupee, and muted corporate earnings have fueled a sharp downturn. FIIs have offloaded ₹1,13,721 crore in equities in just the first two months of 2025, pushing markets into their longest losing streak since 1996.

Finance Minister Nirmala Sitharaman in the last budget raised capital gains tax from 10% to 12.5%. The move has sparked criticism from investors and analysts, who argue that higher taxes could further dampen market sentiment and discourage long-term investment. 

Market experts predict some stabilisation by March, with expectations of improved macroeconomic indicators and easing FII selling pressure.