Benchmark indices extended their Tuesday recovery, adding roughly Rs 1.7 lakh crore to the combined market value held by equity investors, after Finance Minister Nirmala Sitharaman indicated that the government was prepared to consider public input on whether the long-term capital gains tax should be removed and whether changes to the securities transaction tax were warranted.

At the Bloomberg New Economy Forum in New Delhi, Sitharaman noted that both domestic and foreign investors had been actively weighing in on the taxation of equity gains, with the long-term capital gains levy, the securities transaction tax, and the broader question of uniform treatment across asset classes all drawing considerable discussion from market participants.

The statement that such debate is worthwhile came alongside ongoing conversations about the tax load placed on equity investors, a topic that gained renewed attention after the government moved to lift STT rates on equity derivatives through the Union Budget 2026. Those remarks provided enough momentum for both the Nifty 50 and the Sensex to push their advances past the 1% threshold.

Throughout the trading day, the Nifty had repeatedly failed to hold above 22,600, yet it managed to push through that barrier and briefly touched 22,700 before pulling back. Shares in exchange-related firms — among them BSE, CDSL, and NSDL — moved upward on the back of comments made by the Finance Minister.

Under current rules, equity holdings kept beyond a 12-month threshold face a long-term capital gains levy of 12.5%, though the first Rs 1.25 lakh of qualifying profits in any given year falls outside that charge. Under Budget 2026 provisions, the securities transaction tax applied to equity futures climbed from 0.02% to 0.05%. Options premiums now carry a levy of 0.15%, up from the previous 0.1%, and the securities transaction tax applied when options are exercised has moved to 0.15% from its earlier level of 0.125%.

No immediate policy shift came from Sitharaman's remarks, though her comments left open the door for stakeholder input to feed into the Budget consultation process.

Sitharaman drew attention to rising private-sector commitments across a range of industries — renewable energy, semiconductors, chip design and packaging, data centres, transmission infrastructure, green hydrogen, and green ammonia — noting in her remarks that the momentum extended well beyond artificial intelligence into the semiconductor supply chain, covering chip architecture, design, and packaging. Her remarks pointed to the country's push into sectors expected to underpin artificial intelligence development.

Biosimilars, pharmaceutical manufacturing, and maintenance, repair and overhaul (MRO) facilities all featured among the investment areas the Finance Minister highlighted, alongside a note that civil aviation in India was expanding at roughly 16 per cent annually. Turning to infrastructure, she noted that the National Infrastructure Pipeline — a programme set in motion toward the end of 2019 — had by that point accumulated a total value exceeding $4.5 trillion.

Turning to institutional capital flows, she pointed to the roles played by NaBFID and NIIF in attracting investment, after which she put forward the position that India had delivered consistently across development-dependent sectors throughout the ten years prior. The trajectory, she indicated, was one she expected to hold.

Currency fluctuations drew her attention as well, with the Reserve Bank of India's ongoing stabilisation efforts forming part of her remarks. The Finance Minister pointed to a mix of predominantly global pressures as the main force behind the currency's slide, while maintaining that the country's underlying economic position remained on solid footing.

The Finance Minister described fiscal discipline as a matter the Prime Minister holds in high regard, pointing to budget restraint practices that reportedly characterised Modi's earlier years running Gujarat's state government. Investor anxiety over budget management was something she pushed back against, arguing the underlying discipline remained intact.

Sitharaman's remarks stopped well short of any firm commitment to abolish the LTCG tax or reduce the STT. Whether the concerns raised by investors eventually shape upcoming Budget deliberations is the question now sitting at the centre of attention for those active in equity markets.