Union Budget 2026, Jan. 24 -- As the Union Budget approaches, one familiar demand has resurfaced across Dalal Street and among long-term investors: the removal of Long-Term Capital Gains (LTCG) tax on equities. Introduced with the intent of improving tax fairness, LTCG has, over the years, become one of the most debated aspects of India's investment taxation framework.

Each Budget season, market participants revisit the same question-does taxing long-term equity gains align with India's goal of encouraging household participation in capital markets?

To understand the debate, it is important to first understand what LTCG is and why it continues to attract criticism despite its relatively modest rate.

Long-Term Capital Gain refers to the...