Angel One, CDSL, Motilal Oswal Shares Rally Up To 7% As Sitharaman Signals Openness To LTCG Tax Review

Shares of capital market companies rallied up to 7% on Tuesday after Union Finance Minister Nirmala Sitharaman acknowledged concerns among foreign and domestic investors regarding India's equity taxation framework.

The remarks raised expectations of a possible review of long-term capital gains (LTCG) tax, lifting sentiment across brokerage, depository and other market-linked stocks.

The Nifty Capital Markets index climbed more than 3%, with all 17 constituent stocks trading higher.

Angel One emerged as the biggest gainer, advancing 7%, followed by Motilal Oswal Financial Services, which rose 6%.

Central Depository Services (India) Ltd (CDSL) gained 5.4%, while Computer Age Management Services advanced 4.64%.

Shares of Groww, BSE, Nuvama Wealth Management and Multi Commodity Exchange of India (MCX) increased between 1% and 3%.

The broad-based rally followed Sitharaman's comments indicating that the government was willing to consider feedback from market participants about existing equity taxes.

Reports had earlier suggested that changes to the LTCG tax structure could be considered in the coming weeks, potentially before the Union Budget.

Any such review could affect both domestic investors and foreign portfolio investors (FPIs).

Responding to a question about whether the upcoming Union Budget could introduce more favourable taxation for overseas investors, Sitharaman did not announce any proposed changes.

However, she acknowledged that investment conditions had evolved and that concerns surrounding equity taxation had intensified.

"I realise the anxieties prevailing among retail investors and equity participants," she said.

Currently, gains from listed equities held for the qualifying long-term period attract LTCG tax at 12.5%, without indexation benefits.

For eligible listed equity investments, the tax applies to annual long-term gains exceeding Rs1.25 lakh.

The same exemption threshold does not apply to gains from unlisted shares.

Market participants are now watching for further government signals on possible tax reforms.

However, no formal decision to revise LTCG rates or exemption limits has been announced.