Labor is considering including capital gains tax exemptions in the budget legislation it will ram through the Senate in a bid to shut down political blowback.

The warning about the potential impact on business comes as the Senate begins a two-day inquiry into the tax changes announced in the May budget.

Business groups are urging the government to scrap its capital gains tax changes as the first tranche of measures is scrutinised at a parliamentary inquiry.

The government is proposing to dump the 50 per cent CGT discount in favour of the pre-1999 inflation indexation system.

Labor is considering including capital gains tax exemptions in the budget legislation it will ram through the Senate in a bid to shut down political blowback.