Sitharaman to Hear Views on Capital Gains and Transaction Tax as RBI Tackles Rupee Swings

UPDATE - follow-up to RBI to continue efforts to curb rupee volatility; external factors driving currency fall: Nirmala Sitharaman: Finance Minister Nirmala Sitharaman said on Oct 13 she will hear every opinion on the long‑term capital gains (LTCG) tax and the securities transaction tax (STT). She noted that several other ministers have also raised the STT issue, saying it runs alongside the LTCG debate and that India may need to adopt one of the two. She did not confirm whether either tax will be part of the Budget 2027 discussions. Her comments lifted the main stock index by about 1 % within minutes. Sitharaman also said the Reserve Bank of India will keep using its regulatory tools to curb rupee volatility, stressing that the central bank is not trying to fix the exchange rate but to stop sharp swings. Recent RBI moves include the Oct 10 directive that oil‑importing companies move dollar purchases away from the spot market and a tightening of currency‑hedging rules. She explained that capital worldwide is flowing toward the United States and to frontier artificial‑intelligence projects, while India’s conventional AI development also aims to draw investor interest.

Context

The LTCG and STT discussion shows ongoing concerns about tax impact on investors, and RBI’s actions are meant to stabilise the rupee as external capital flows put pressure on the currency.