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20 Years of Stock Market Taxes in India (2004–2026)

20 Years of Stock Market Taxes in India

How retail participation, transaction taxes, and capital gains rates changed from 2004 to 2026
Unique Investors (NSE)
13.5 Cr
1.8 Cr (FY15) → 13.52 Cr (Aug 2026)
Yearly STT Collected
₹63,670 Cr
₹1,500 Cr (FY05) → ₹63,670 Cr (FY26 RE)
Long-Term Tax Rate
12.5%
0% (2004) → 12.5% (2026)
Sources: NSE Market Pulse (Sep 2026) · Union Budget Receipt Documents (Major Head 0034) 01 / 08

13.5 Crore Indians Now Invest in Stocks

Unique PAN-registered investors on the National Stock Exchange (in Crores)
1.8 FY15 2.5 FY18 3.1 FY20 5.9 FY22 9.2 FY24 11.3 FY25 13.52 Cr Aug 2026
Source: NSE Market Pulse, September 2026 (Table 69 — Unique Registered Investors by PAN) 02 / 08

STT Collections Have Grown 42× Since 2005

Annual Securities Transaction Tax collected by the government (₹ Crore)
₹1,500 FY05 ₹7,398 FY15 ₹11,437 FY20 ₹23,191 FY22 ₹33,778 FY24 ₹52,197 FY25 ₹63,670 FY26 RE
Source: Union Budget Receipt Documents (Actuals up to FY25; Revised Estimate for FY26; FY27 BE is ₹73,700 Cr) 03 / 08

2004 vs. Today: From One Tax to Two

When STT was introduced in October 2004, long-term capital gains tax was reduced to zero
OCTOBER 2004
Delivery STT (each side) 0.075%
Long-Term Capital Gains Tax 0%
STT was introduced as a clean replacement for long-term capital gains tax.
TODAY (2026)
Delivery STT (each side) 0.10%
Long-Term Capital Gains Tax 12.5%
Investors now pay both taxes at higher rates on the same investment.
Source: Finance (No. 2) Act, 2004 & Finance (No. 2) Act, 2024 · Delivery STT applies to both buy and sell 04 / 08

How Stock Market Tax Rates Changed

Tax rates on listed equity shares in India from 2000 to 2026
2000
Oct 2004
2008
2018
2024–26
Long-Term Tax (>1 yr)
10%*
0%
0%
10%
12.5%
Short-Term Tax (<1 yr)
30%*
10%
15%
15%
20%
Delivery STT (each side)
0%
0.075%
0.125%
0.10%
0.10%
*In 2000, LTCG was 10% flat (or 20% with indexation) and STCG was taxed at income tax slab rates (up to 30%). 05 / 08

Capital Gains Tax Across Investments Today

How different investments are taxed after the 2024–2026 rules simplified holding periods
Investment
Long-Term Period
Long-Term Tax
Short-Term Tax
Stocks & Equity Mutual Funds
> 1 year
12.5%
20%
Listed Gold & Silver ETFs
> 1 year
12.5%
Slab rate
Physical Gold & Real Estate*
> 2 years
12.5%
Slab rate
Unlisted Shares & Gold FoFs
> 2 years
12.5%
Slab rate
FDs & Debt Mutual Funds
Any period
Slab rate
Slab rate
*For property bought before July 23, 2024, resident individuals can choose 12.5% without indexation or 20% with indexation. 06 / 08

Three Rules Every Investor Should Know

How exemptions, transaction taxes, and losses work on your investments
₹1.25 Lakh
Tax-free profit every year

Your first ₹1.25 Lakh of long-term profit in stocks and equity mutual funds each financial year is completely tax-free.

Paid on Loss
STT is not deductible

STT (0.1% on buy + 0.1% on sell) is charged on the full trade value even when you sell at a loss, and cannot be deducted from your taxable profit.

8 Years
Carry forward your losses

Short-term losses reduce both short-term and long-term gains. Unused losses can be carried forward for 8 years if you file your ITR on time.

Source: Income Tax Act — Sections 112A, 48 & 74 07 / 08

Some Suggestions

Three ways to make stock market taxation fairer for long-term savers
01
Credit STT against LTCG

Let investors deduct the STT already paid on their trades from their long-term capital gains tax bill.

02
0% tax after 5 years

Reward patient capital by making equity holdings held for more than 5 years completely tax-free.

03
Adjust gains for inflation

Bring back indexation so investors pay tax only on real gains above the Cost Inflation Index.