Samir Arora Advocates for Zero LTCG Tax on Bitcoin (BTC) to Boost Public Wealth Creation

<ul>
  <li>Helios Capital founder Samir Arora has advocated for doing away with the long-term capital gains (LTCG) tax in India, saying that the removal will be the ‘best thing to create wealth for the public’.</li>
  <li>Arora believes that eliminating the LTCG tax will attract foreign investments and aid in the divestment process of public sector undertakings (PSUs).</li>
  <li>In a discussion on the microblogging platform ‘X’, Arora emphasized that the absence of LTCG tax would significantly benefit the Indian public.</li>
</ul>
<p><strong>Samir Arora advocates for the removal of LTCG tax to boost wealth creation and attract foreign investments.</strong></p>
<h2><strong>Samir Arora's Call for LTCG Tax Removal</strong></h2>
<p>Samir Arora, the founder of Helios Capital, has made a strong case for the abolition of the long-term capital gains (LTCG) tax in India. According to Arora, removing this tax would be a pivotal move to foster wealth creation among the Indian public. He argues that the elimination of the LTCG tax would not only attract foreign investments but also streamline the divestment process of public sector undertakings (PSUs).</p>
<h3><strong>Impact on Foreign Investments and PSUs</strong></h3>
<p>Arora's perspective highlights the broader economic implications of removing the LTCG tax. He suggests that the absence of this tax would make the Indian market more attractive to foreign investors, thereby increasing the inflow of foreign capital. This, in turn, would provide a significant boost to the economy. Additionally, the divestment of PSUs would become more efficient, as the removal of the LTCG tax would likely increase investor interest in these entities.</p>
<h2><strong>Understanding LTCG Tax</strong></h2>
<p>The long-term capital gains (LTCG) tax is levied on the profits earned from the sale or transfer of certain long-term assets, such as stocks, real estate, and mutual funds. This tax is applicable only when the assets are held for a specific period, typically more than one year, before they are sold. In India, LTCG on shares and equity-oriented mutual funds are taxed at a 10 percent rate (plus surcharge and cess) if the gains exceed ₹1 lakh in a fiscal year.</p>
<h3><strong>Current Taxation Scenario</strong></h3>
<p>Under the current taxation framework, capital gains are categorized into short-term and long-term gains. Short-term capital gains are taxed at a higher rate compared to long-term gains. The LTCG tax on shares and equity-oriented mutual funds, introduced in 2018, has been a topic of debate among investors and policymakers. Critics argue that this tax discourages long-term investments and affects market sentiment.</p>
<h2><strong>Arora's Hypothetical Scenarios</strong></h2>
<p>In a discussion on the platform ‘X’, Arora was presented with two hypothetical scenarios. The first scenario considered the continuation of the current government with changes in the LTCG tax policy post the 2024 Lok Sabha Elections. The second scenario imagined a different government coming to power with no changes to the LTCG tax for the next five years. Arora's stance remained firm that the removal of the LTCG tax would be beneficial regardless of the political landscape.</p>
<h3><strong>Challenges of Managing Funds with Cash</strong></h3>
<p>In a separate post, Arora addressed the challenges faced by fund managers when holding cash within a fund. He pointed out that even holding 10 percent cash can become problematic, as it creates a conflict of interest. Fund managers might start hoping for a market downturn to deploy the cash, which contradicts their overall investment strategy. This insight underscores the complexities of fund management and the impact of market conditions on investment decisions.</p>
<h3><strong>Conclusion</strong></h3>
<p>Samir Arora's advocacy for the removal of the LTCG tax brings to light important considerations for India's economic policy. By eliminating this tax, India could potentially attract more foreign investments and enhance the efficiency of PSU divestments. As the debate continues, it remains to be seen how policymakers will address these suggestions and what impact such changes could have on the Indian economy and its investors.</p>