In a strong pitch for investor-friendly reforms, Aam Aadmi Party (AAP) MP Raghav Chadha on Tuesday urged the government to abolish Long-Term Capital Gains (LTCG) tax, calling it an unnecessary burden on the middle class and long-term investors.
Speaking in Parliament, Chadha argued that taxing long-term investments discourages savings, weakens household wealth creation, and goes against the idea of promoting financial discipline among citizens.
Chadha pointed out that millions of salaried professionals and small investors rely on long-term investments in shares, mutual funds, and other assets to secure their future. “People who invest patiently over many years should be rewarded, not penalized,” he said, adding that LTCG tax effectively punishes honest savings while offering limited revenue benefits to the exchequer.
The AAP leader emphasized that India needs to encourage a strong investment culture, especially at a time when inflation and rising living costs are putting pressure on household finances.
According to him, removing LTCG tax would boost investor confidence, increase participation in capital markets, and ultimately strengthen the economy through higher domestic investment.
Chadha also compared India’s tax regime with global practices, noting that several countries offer tax incentives or exemptions for long-term investments to promote economic stability. He argued that instead of squeezing small investors, the government should focus on widening the tax base and plugging loopholes that allow large-scale tax evasion.
His remarks come amid ongoing debates over tax reforms and middle-class relief. While the government has defended LTCG tax as a source of revenue and a tool for tax equity, Chadha maintained that the actual burden falls disproportionately on ordinary citizens planning for retirement, education, or healthcare.
The statement has sparked fresh discussion in political and financial circles, with many investors welcoming the idea, while others await clarity on how such a move would impact government finances. Whether the demand gains traction or not, Raghav Chadha’s call has once again brought middle-class investment concerns to the center of parliamentary debate.
