No. India did not always have long-term capital gains tax (LTCG). In fact, in 2004 Section 10(38) was introduced in the Income Tax Act, 1961, to attract investment from foreign investors (FIIs). This was done on the basis of the Kelkar Committee report. Section 10(38) was used to provide an exemption from the long-term capital gains tax which arose on the sale of shares or units of an equity-oriented mutual fund.

However, it was withdrawn from the Income Tax Act, 1961, in 2018, when Finance Minister Arun Jaitley reintroduced the LTCG tax, via Section 112A to tax LTCG on sale of:

1. Equity shares 2. Equity-oriented mutual fund units 3. Business trust units (such as Real Estate Investment Trusts (ReITs) and Infrastructure Investment Trusts (InvITs)

The LTCG tax is levied at 10% on the gains in excess of Rs. 1 lakh without the benefit of indexation.