Weren’t Indian investors exempt from the long-term capital gains tax (LTCG)?

Yes, Indians were exempt from paying the long-term capital gains tax (LTCG) until Budget 2018. This is because Budget 2018-19 proposed to delete Section 10(38) of the Income-tax Act, 1961. This Section 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.

The Section 10(38) was introduced on the basis of the Kelkar Committee report in order to attract investment from foreign investors (FIIs) in 2004.