News Update: LTCG on Government Securities Slashed to Zero

The Government of India has decided to remove all taxes on gains made by foreign investors from G-Secs, a clear strategy to make the countrys sovereign debt market more appealing to global capital.

Issuing the Income Tax Amendment Ordinance, 2026, the government has exempted Foreign Institutional Investors (FIIs) from paying tax on interest earned on government securities (G-Secs). The ordinance also removes capital gains tax on the sale or transfer of such securities.

The changes will apply retrospectively from April 1, 2026.

The Measures Announced by the Finance Minister to Attract Investors to Indias Capital Market

Aligning with the governments vision to make India as a leading global investment destination and to penetrate the capital market, the Finance Ministry has introduced a series of measures with a view to improving the ease of investment for individual Persons Resident Outside India (PROIs) and Foreign Portfolio Investors (FPIs) and to attracting long-term foreign capital flows, the government said in a statement.

The revised framework saw the reduction of the long-term capital gains (LTCG) tax on government securities from 12.5% to zero. The government also scrapped the withholding tax on interest income from these securities. Previously, the withholding tax rate was 20%. Consequently, returns earned by foreign investors from investments in Indian sovereign bonds will bear no tax.

The ordinance widens similar tax exemptions to the Bank for International Settlements (BIS), a Switzerland-based international financial institution that serves central banks globally.

The government reckons the tax overhaul will make India‘s appeal stronger among global debt investors amid a growing integration between the country’s bond market and international financial markets.

The governments decision is paramount as the country looks to penetrate its sovereign debt market and invite a larger pool of long-term capital from overseas.

The Objective Behind Tax Relief

Analysts expect the tax exemptions to continue to support demand for government bonds and further enhance the competitiveness of Indian debt relative to other emerging-market fixed-income instruments.

These reforms are aimed at decreasing operational complexities, simplifying market access, and ensuring a more seamless investment experience at par with leading international financial markets.

Conclusion

The government's decision to eliminate long-term capital gains tax and interest-related taxes on government securities for foreign investors marks a significant step toward making Indias sovereign debt market more globally competitive. By lowering investment costs and simplifying market access, the reforms are expected to attract greater foreign participation, deepen liquidity in the bond market, and strengthen India's position in global fixed-income portfolios. As India continues to integrate with international financial markets, these tax incentives could play a crucial role in drawing long-term overseas capital and supporting the country's broader economic and capital market development goals.

Download the WikiFX App for the latest financial updates around the world.

More Insightful Articles for You

Indian Stocks Take a Beating, Sensex Falls by Over 600 Points Today: Check Out Why

Indian stock markets witnessed a sharp low in the early trading hours on Monday. While the Sensex fell by more than 600 points, Nifty slumped under 23,200. The fall in the stock market today is the investors’ reaction to the escalating tensions in the Middle East, a surge in crude oil prices and weakness across markets worldwide. At around 9:30 a.m. on June 8, 2026, the BSE Sensex dropped by 627.47 points to 73,615.87, recording a fall of 0.85%. At the same time, the Nifty declined by 195.40 points to 23,171.30, registering a 0.84% fall. The selloff was broad based, with most sectoral indices slipping into red. Nifty IT, Nifty Realty, Nifty Auto and Nifty Metal slipped by 1.61%, 1.68%, 1.21% and 1.31%, respectively. Even the Nifty Midcap 100 and Nifty Smallcap 100 declined by 0.73% and 0.63%, respectively. As far as Sensex stocks are concerned, only State Bank of India, Axis Bank, Power Grid Corporation of India and Sun Pharmaceutical Industries were found to be green. Among the one

News 2026-06-08

相关内容

Pepperstone Review 2026: Massive Deposit & Withdrawal Complaints Against This Regulated Broker

Have you experienced issues with Pepperstone deposit & withdrawal processing? From your experience, do you feel that the Australia-based forex broker causes losses to its clients? Did the brokerage entity freeze your account and give you a margin call? All these trading allegations have been rampant on broker review platforms such as WikiFX. This Pepperstone review article takes a close look at the user complaints, especially in 2026. Additionally, we have given an overview of the regulatory framework under which the brokerage entity operates.

Exposure 2026-06-06

相关内容

RBI Keeps Repo Rate Unchanged at 5.25%; What Will Happen to Your Home Loan EMI and Savings?

The Reserve Bank of India (RBI) decided to keep the repo rate unchanged at 5.25% in its monetary policy meeting on June 6, 226. The decision comes after the six-member monetary policy committee discussed the situation over days. The unanimous decision came hours after the US President Donald Trump decided a double-sided ceasefire with Iran. The global markets, including India, rallied after the US decision. The RBI governor-led monetary policy committee sits every two months to analyze key economic indicators and discuss the way forward through their policies.

News 2026-06-05

相关内容

Wundersys vs tradgrip: Two Offshore Newcomers Go Head to Head — and Neither Brings Home a Trophy

Some broker comparisons end with a confident "go with this one." This is not one of them — and that honesty is exactly what makes it worth reading. Wundersys and tradgrip are two young, offshore-registered brokers that keep popping up in front of beginner traders, often through aggressive online marketing. Both promise the usual buffet: tight spreads, generous leverage, multiple account tiers. And both, according to WikiFX, sit near the very bottom of the safety scale. So instead of crowning a champion, this comparison is really about something more useful: learning to read the warning signs, understanding the small differences that still matter, and knowing why "the better of two risky options" is still a conversation about risk.

News 2026-06-05

相关内容