The government has enough fiscal headroom to absorb an estimated ₹40,000–₹50,000 crore revenue loss if long-term capital gains (LTCG) tax is abolished, according to SBI Research. The report says the impact would amount to around 0.1–0.2% of GDP in FY28. It has also proposed raising the annual LTCG exemption limit to ₹2 lakh and increasing Securities Transaction Tax (STT) by 50% to help offset the revenue loss. These are recommendations, not announced government policy.
