In a world where every rupee counts, Indian taxpayers often feel the pinch of heavy taxes without receiving much in return. Recently, Akshat Shrivastava, a well-known finance educator and entrepreneur, sparked an important debate — he advocated for reducing India’s Long-Term Capital Gains (LTCG) tax to 0%. His arguments touch upon real concerns about India’s tax structure, the services taxpayers receive, and the future of the country’s investment climate.
Let’s dive deeper into what he’s suggesting and what it could mean for investors and the economy at large.
Why Akshat Shrivastava Believes 0% LTCG Tax Makes Sense
Shrivastava’s concerns center around the imbalance between what Indian taxpayers give and what they get in return. Here’s the heart of his argument:
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High Taxes, Limited Services
In India, people pay significant taxes but still struggle with poor healthcare, substandard education, and patchy infrastructure. -
The Sweden Example
Shrivastava draws a sharp comparison with Sweden — a country that charges a 30% capital gains tax but offers top-notch public services like:-
Free, high-quality healthcare
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Subsidized, world-class education
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Excellent public infrastructure
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Need for Investment-Friendly Policies
According to him, lowering the LTCG tax to 0% would:-
Boost long-term investments
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Accelerate economic growth
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Generate more jobs
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Make India more attractive for foreign investors
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India vs Sweden: A Quick Snapshot
Here’s a simple comparison of the two countries’ tax systems and what citizens get in return:
| Aspect | India | Sweden |
|---|---|---|
| LTCG Tax Rate | 10% for gains over ₹1 lakh | 30% |
| Public Services | Limited access to healthcare, education, and infrastructure | Free healthcare, subsidized education, world-class infrastructure |
| Economic Growth Focus | Moderate growth with high tax burden | High growth, supported by strong services |
| Taxpayer Satisfaction | Low, due to poor service delivery | High, due to visible benefits |
What Would a 0% LTCG Tax Mean for India?
If India were to boldly move towards zero LTCG tax, several positive shifts could happen:
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Higher Stock Market Participation
More investors would feel encouraged to invest for the long term without worrying about taxes eating into their profits. -
Boost to the Startup Ecosystem
Startups could find it easier to attract funding, as investors would see higher after-tax returns. -
Foreign Investment Surge
India could become a magnet for global investors, strengthening its financial markets and overall economy.
But It’s Not All Sunshine: Potential Challenges
While the idea sounds exciting, there are some serious roadblocks to consider:
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Government Revenue Loss
LTCG taxes form a chunk of the government’s income. Eliminating them could create budget gaps, affecting spending on public welfare. -
Widening Wealth Inequality
The rich hold most long-term investments. Reducing their tax burden could make India’s wealth gap even wider. -
Political and Structural Hurdles
Policy overhauls like this require strong political will and careful redesigning of tax systems — not an easy task.
Final Thoughts
Akshat Shrivastava’s argument for a 0% LTCG tax challenges India’s traditional way of thinking about taxation and economic growth. In a country where public services often fall short, reducing the burden on investors could unlock new growth avenues.
However, implementing such a policy would demand a delicate balancing act — ensuring the economy gets the investment push it needs without sacrificing essential public services.
Change won’t be easy. But perhaps it’s time India reimagined how it taxes, spends, and grows.
FAQs
1. What is Long-Term Capital Gains (LTCG) tax in India?
LTCG tax is a tax on profits earned from selling investments like stocks or real estate that were held for more than one year. In India, it currently stands at 10% for gains exceeding ₹1 lakh.
2. Why is Akshat Shrivastava advocating for 0% LTCG tax?
He believes that India’s taxpayers pay high taxes without receiving adequate public services. Reducing LTCG tax to 0% could encourage investments, boost the economy, and create jobs.
3. How does India’s LTCG tax compare with other countries?
Countries like Sweden have higher LTCG taxes (30%), but their citizens enjoy excellent public services like free healthcare and education. India, on the other hand, offers fewer benefits despite taxing citizens heavily.
4. What could be the downside of implementing a 0% LTCG tax?
The government could lose significant revenue, and wealth inequality might worsen as the rich would benefit more from such a policy.
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