Experts Urge Budget 2026 Relief: High STT, LTCG Drive Record Foreign Outflows

• Market experts highlight high Securities Transaction Tax (STT) and Long-Term Capital Gains (LTCG) tax as major drags on investor sentiment and market participation in India.
• The cumulative tax burden increases the 'hurdle rate' for returns, making Indian markets less attractive for retail investors and foreign institutions compared to peers like the US.
• Dr. Ravi Singh of Master Capital Services Ltd. notes that STT makes transacting in Indian markets significantly costlier, impacting retail inflows and potentially favoring institutional players.
• Santosh Meena of Swastika Investmart states that elevated transaction costs are a structural headwind for Foreign Institutional Investors (FIIs), contributing to record foreign selling.
• Experts like Pranay Aggarwal of Stoxkart advocate for rationalizing STT and easing LTCG in Budget 2026 to boost market depth, liquidity, and investor confidence.

Why It Matters: Experts call for STT and LTCG tax cuts in Budget 2026 to counter record foreign outflows and boost market sentiment.