Retail investors pay STT, GST, capital gains tax, brokerage, and a dozen other charges just to participate in the market. Meanwhile, sources say FIIs investing in G-Secs could be exempt from all taxes, with the government even considering an ordinance to make it happen.
Nothing against attracting foreign capital, but it’s funny how the solution to “make investing attractive” always seems to start with someone other than the retail investor.
Now exempting from capital gain taxes in cash & equities segement
wish they reduce STT for everyone. It’s simply killing my cash trades like anything
Pretty sure its about taxes on Gsec gains, not all taxes across categories 
GoI needs the forex, no use extending these benefits to retail Indians. 
What now its confirmed FII needs to pay 0 taxes on GSEC
If they buy gsecs from secondary market , then we can sell gsecs to FII while they started buying , we can also get the benefit (profit not the tax cut). Also Rupee value may strengthen due to the FII investment (If happens).
Doubt whether it’ll have that much effect. Nothing fundamental changed. Bond value is still based on India’s ability to repay. Government is just trying all sorts of bandages instead of fixing fundamental issues like easing business compliance and promoting true innovation.
Does anyone here have expertise in bonds and fixed-income returns? Do you think the market will price in the 20% tax savings benefit, similar to how gold prices adjusted after the import duty changes were factored in?
On the other hand, This might be a great time for FII/FPIs to book profit and exit, before the government changes it’s mind “retroactively” next year and “clarifies” that this 40% tax has always been the case (
SGBs)
Do you know if this Tax Free Scheme is only for fresh Investments made after 1 April 2026?
No it’s for all investments.
The exemption shall be applicable w.e.f. 01.04.2026, i.e. the exemption shall apply to any interest or capital gains arising to FPIs on or after 01.04.2026 in respect of investments in G-Secs.
If FPI stay in they run the risk of government changing it’s mind soon. Government isn’t promising those who invest now will get 0% tax when they sell. They are saying The tax is 0% “for now”! There is no future guarantee.
I don’t think the risk is about changing the mind.
The bigger question is whether a Tax-Free 7.2% return remains attractive in an environment where the AI boom is creating trillion-dollar valuations and fueling expectations of much higher returns elsewhere.
While I agree that is a risk, Government changing it’s mind is also a risk, That 6.9% could drop to 4% very quickly with “retrospective” taxes next year and that too in INR terms.
Currency risk is what I meant when I said
