Govt Open to Feedback on Capital Gains Tax, Market Levies: Sitharaman

Union Finance Minister Nirmala Sitharaman has said that the government is willing to consider suggestions on market-related taxation, including long-term capital gains tax and other levies, amid ongoing concerns over stock market volatility, foreign investor outflows and pressure on the rupee.

Speaking on the sidelines of a business event, Sitharaman stated that the Centre remained open to stakeholder feedback on taxation and investment-related issues.

“We are always ready to hear and listen to people. We will take their inputs,” the Finance Minister said while responding to queries on whether the government may revisit the tax structure in view of weak market returns and global uncertainties.

Her remarks come at a time when Indian equity markets have witnessed volatility due to foreign portfolio investor (FPI) selling, geopolitical tensions, tariff concerns and global risk aversion affecting emerging markets.

Despite recent pressure, Indian benchmark indices rallied sharply on Monday following a decline in global crude oil prices amid hopes of progress in US-Iran peace negotiations. The Nifty 50 climbed 1.32% to 24,031.70, while the Sensex rose 1.42% to 76,488.96, marking their highest closing levels since May 8.

The Indian rupee has also remained under focus. After touching a record low of 96.96 against the US dollar last week, the rupee recovered to close at 95.23 on Monday, aided by falling crude prices and possible intervention by the Reserve Bank of India.

RBI Governor Sanjay Malhotra recently stated that the central bank would do “whatever is required” to ensure orderly movement in the foreign exchange market and indicated that the rupee appeared undervalued.

Sitharaman said the government was actively receiving and gathering suggestions relating to investment climate, currency management and broader economic measures.

The Finance Minister also commented on the recent Rs.2.87 lakh crore surplus transfer approved by the RBI to the Centre for FY 2025-26, which is expected to support the government’s fiscal position.

On fuel prices, Sitharaman defended the recent rise in petrol and diesel prices, stating that the Centre had already absorbed a major portion of inflationary pressures through earlier excise duty reductions. According to her, the government had foregone over Rs.1 lakh crore annually in tax revenue to cushion consumers from higher crude oil prices.

She clarified that recent fuel price increases were implemented by oil marketing companies in response to rising global crude costs. Petrol and diesel prices have increased by nearly Rs.7.5 per litre since mid-May.

Addressing exporters during the TEXPROCIL Export Awards event, Sitharaman also highlighted how geopolitical fragmentation was reshaping global trade and supply chains. She urged exporters to adapt to evolving global requirements relating to sustainability, traceability, technology adoption and fair labour practices.