Finance Minister Nirmala Sitharaman’s expressed “keenness” to hear debate on Long Term Capital Gains (LTCG) Tax and Securities Transaction Tax (STT) lifted investor sentiment on Tuesday. The FM also assured that the Reserve Bank of India (RBI) will continue taking measures to curb rupee volatility. This statement, combined with measures announced by the central bank on Saturday, helped the rupee strengthen for the third straight session on Tuesday, appreciating 40 paise to close at 95.38 (provisional) against the US dollar.
Although the Finance Minister stopped short of signalling any change in the tax regime ahead of the Union Budget, her remarks on LTCG and STT boosted market sentiment, with both the Sensex and Nifty closing up around 1.6 per cent.
Sitharaman open to debate on LTCG tax and STT
Speaking at the Bloomberg New Economy Forum 2026, Sitharaman said: “We are very close to the Budget, and the preparation for the Budget has started. It may not be the best time for me to say what I will or what I will not consider,” she said in response to a question on the rationalisation of LTCG tax and STT.
“This debate on tax in the market, debate on the securities transaction tax, and the question of treating all asset classes, similarly, has been a very well-discussed topic,” she said.
Sitharaman said the government sought to bring different asset classes on a more equal footing two years ago, a move some investors saw as an increase in taxes. The objective, she said, was to ensure that investors did not choose one asset class over another merely because of differences in tax treatment.
“It’s healthy to have this debate, and I will be keenly hearing them,” she said, adding that the issue had also figured in her discussions with investors.
RBI to continue measures to curb rupee volatility
On the rupee, Sitharaman attributed the currency’s significant depreciation over the past 18 months largely to external challenges, while emphasising that India’s macroeconomic fundamentals and foreign exchange reserves remained sound.
“I am sure there are efforts which the RBI would take further to make sure that rupee doesn’t become too volatile,” she said. She clarified that the central bank’s objective was to contain excessive fluctuations rather than defend a particular exchange rate. “So, these efforts from the RBI… will continue not to, as I said, fix the rupee. We would appreciate it if the rupee finds its own (level),” the minister said.
Sitharaman said the RBI’s measures had supported the rupee, which appreciated around one per cent on Monday. The currency extended its gains in early trade on Tuesday before provisionally closing at Rs 95.38 against the dollar.
Uday Kotak backs letting rupee find its own level
In a separate session at the forum, veteran banker Uday Kotak also weighed in on the currency’s valuation, saying: “My personal view is, we should let the rupee find its own level, and over time, the true strength of the economy will play out.”