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Budget 2027: Cut Capital Gains Tax for MSMEs!
10 Nov
Summary
- Abolish long-term capital gains tax on equity investments.
- Reduce short-term capital gains tax from 20% to 10%.
- Relax loan repayment norms for MSMEs, extend NPA period.
The PHD Chamber of Commerce and Industry has presented its pre-Budget recommendations for 2027-28, urging significant tax reforms to invigorate India's capital markets and support Micro, Small, and Medium Enterprises (MSMEs).
Key proposals include the complete abolition of long-term capital gains (LTCG) tax on equity investments and a reduction of short-term capital gains (STCG) tax from 20% to 10%. These changes aim to enhance India's competitiveness in capital markets and encourage sustained investment.
Furthermore, the chamber has recommended a relaxation of loan repayment norms for MSMEs. This includes extending the period for classifying loans as non-performing assets (NPAs) from the current 90 days to 180 days, which would aid smaller businesses in managing working capital cycles and payment delays.
PHDCCI also called for enhanced MUDRA loan limits and strengthened implementation of the CGTMSE scheme. They seek direct government equity investment in MSMEs and a centralized portal for tracking loan applications, emphasizing MSMEs' crucial role in India's GDP, exports, and employment.
