₹1.25 Lakh LTCG Exemption Doesn't Cover Apple, Nvidia Gains — SkimNews
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- India's ₹1.25 lakh LTCG exemption under Section 112A applies only to qualifying domestic equity investments and does not extend to US-listed stocks like Apple, Tesla, and Nvidia, according to Gaurav Makhijani, Managing Partner at Makhijani Gera & Associates LLP.
- Foreign-listed shares require a 24-month holding period to qualify as long-term capital gains — double the 12-month threshold for Indian equities — with gains on shorter-held foreign shares taxed at the investor's income tax slab rate.
- Foreign shares held more than 24 months are taxed at 12.5% without indexation, with gains calculated by subtracting acquisition cost and transfer expenses from sale proceeds, then converted to Indian rupees using prescribed forex rules.
- Finance Minister Nirmala Sitharaman indicated the government will hear investor views on LTCG tax during upcoming Budget consultations, amid calls for relief, foreign investor outflows, and concerns over the competitiveness of Indian equities.
- Minister of State for Finance Pankaj Chaudhary stated in a July 20 parliamentary written response that there is no proposal under consideration to abolish LTCG tax for domestic or retail investors.
Why it matters: Indian investors who profited on US-listed tech names get no ₹1.25 lakh exemption, face a 24-month LTCG clock instead of 12, and owe slab-rate tax on shorter-held foreign shares — a materially worse tax treatment than domestic equities. With Sitharaman flagging Budget consultations but Chaudhary confirming no abolition is planned, the domestic-foreign asymmetry in Section 112A stays intact.
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