📈 Pre-Budget Equity Taxation and Foreign Investment Concerns As the deadline for Budget 2026 nears, the domestic equity market is expressing a clear demand for **taxation relief** measures. This call is catalyzed by a backdrop of sustained **foreign institutional investor (FII) selling** pressure and a period of relatively weak overall market returns. Market Context and Key Concerns: * **Taxation Evolution:** Indian equity taxation has undergone significant restructuring in recent years, notably with the reintroduction of the **Long-Term Capital Gains (LTCG) tax** in 2018. Additionally, the effective tax rate on **Short-Term Capital Gains (STCG)** has seen recent upward adjustments. * **Reviving Inflows:** Market participants are now prioritizing policy adjustments that could mitigate the current tax burden. The primary objective is to make Indian equities more attractive to international investors, thereby aiming to **revive FII inflows** and restore overall market confidence. Policy Demand: The market consensus hinges on the expectation of favorable tax policy modifications in the upcoming budget to address the existing disconnect and stimulate capital market activity.