Is there a grandfathering clause for equity LTCG?

Yes. For equity investments made before 31 January 2018, the cost of acquisition is deemed to be the higher of the actual purchase price or the fair market value (the 52-week high price) as on 31 January 2018. This protects gains accrued before LTCG was reintroduced in Budget 2018.

Can I save capital gains tax by reinvesting in property or bonds?

Yes. Under Section 54, LTCG from selling a residential property can be exempted if you reinvest in another residential property within 2 years (purchase) or 3 years (construction). Under Section 54EC, up to ₹50 lakh of LTCG can be exempted by investing in specified capital gains bonds (NHAI, REC) within 6 months of the sale. These exemptions do not apply to equity capital gains.

What is the STCG tax rate on equity shares?

Short-Term Capital Gains (STCG) on listed equity shares and equity mutual funds (held 12 months or less) are taxed at 20% (raised from 15% in Budget 2024, effective 23 July 2024). For unlisted shares and other assets held short-term, STCG is taxed at your applicable income tax slab rate.

Capital Gains Tax Calculator

Q: What is the LTCG tax rate on stocks and equity mutual funds?

After Budget 2024 (effective 23 July 2024), Long-Term Capital Gains (LTCG) on listed equity shares and equity mutual funds held for more than 12 months are taxed at 12.5% (increased from 10%). The first ₹1.25 lakh of LTCG per year is exempt from tax (increased from ₹1 lakh). No indexation benefit is available for equity.

Q: What is the holding period for long-term capital gains?

For listed equity shares and equity mutual funds: more than 12 months. For debt mutual funds, bonds, and gold: more than 24 months (2 years). For real estate and unlisted shares: more than 24 months. For any asset held below these periods, gains are classified as Short-Term Capital Gains (STCG).

Calculate short-term and long-term capital gains tax on investments for India FY 2024-25.

India FY 2024-25 rates (post Budget 2024 - effective 23 July 2024)

Asset Type

Purchase Price (₹)

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Sale Price (₹)

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Holding Period

yrs

LTCG already used this year (equity exemption ₹1.25L)

₹

Capital Gain

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Gain Type

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Tax Rate

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Tax Payable

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Net Proceeds

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Effective Return

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📈 What is Capital Gains Tax?

Capital Gains Tax (CGT) is a tax levied on the profit earned when you sell a capital asset - such as stocks, mutual funds, real estate, gold, or bonds - for more than you paid for it. The profit (sale price minus purchase price minus any expenses) is called a capital gain, and it attracts tax in the year of sale.

In India, capital gains are classified into two types based on the holding period. Short-Term Capital Gains (STCG) arise when assets are sold within a specified period: within 12 months for listed equity and equity mutual funds, and within 24 months for debt mutual funds, bonds, property, and gold. Long-Term Capital Gains (LTCG) apply when assets are held beyond these periods.

The tax rates differ significantly. For equity investments, STCG is taxed at 20% (flat), while LTCG above ₹1.25 lakh per year is taxed at 12.5% - both flat rates that apply regardless of your income tax slab. For debt instruments and property, gains are added to your income and taxed at your applicable slab rate (STCG), while LTCG is taxed at 12.5% without indexation (post Budget 2024).

Budget 2024 (effective 23 July 2024) made significant changes: the equity LTCG exemption was raised from ₹1 lakh to ₹1.25 lakh, the LTCG rate on equity was raised from 10% to 12.5%, the STCG rate on equity was raised from 15% to 20%, and indexation benefit was removed for most asset classes. Understanding these rules helps you make better investment and tax-planning decisions.

📐 Capital Gains Tax Formula

Capital Gain = Sale Price − Purchase Price − Transfer Expenses

Tax = Taxable Gain × Applicable Rate

Equity STCG (held ≤12 months): taxed at 20% flat

Equity LTCG (held >12 months): 12.5% on gain above ₹1.25L

Debt / Property / Gold STCG: added to income, taxed at slab rate

Debt / Property / Gold LTCG (held >24 months): 12.5% without indexation

All capital gains tax figures are further subject to a surcharge (if income exceeds ₹50L) and a 4% Health and Education Cess on the tax amount. This calculator shows the base tax before cess for simplicity.

📖 How to Use This Calculator

Steps to Calculate Your Capital Gains Tax

Select the asset type - equity, debt, property, gold, or unlisted shares. The holding period threshold and tax rates differ by asset class.

Enter your purchase price (cost of acquisition, including any brokerage paid at time of purchase).

Enter the sale price (net proceeds after brokerage). For equity, the exchange value minus brokerage and STT is the net sale consideration.

Enter the holding period (years and months). The calculator automatically determines STCG vs LTCG based on the asset type.

For equity LTCG, enter any LTCG already utilised this financial year to correctly apply the ₹1.25L annual exemption.

💡 Example Calculations

Example 1 - Equity LTCG: Stocks held 18 months

Bought ₹5,00,000 in stocks | Sold at ₹8,00,000 | Held: 18 months (LTCG)

Capital Gain = 8,00,000 − 5,00,000 = ₹3,00,000

Exempt: ₹1,25,000 | Taxable LTCG = 3,00,000 − 1,25,000 = ₹1,75,000

Tax = 1,75,000 × 12.5% = ₹21,875 (+ 4% cess = ₹22,750 total)

Net proceeds after tax: ₹7,77,250 | Effective post-tax return: 55.45%

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Example 2 - Equity STCG: Stocks sold within 8 months

Bought ₹2,00,000 | Sold at ₹2,60,000 | Held: 8 months (STCG)

Capital Gain = 2,60,000 − 2,00,000 = ₹60,000

Tax = 60,000 × 20% = ₹12,000 (+ 4% cess = ₹12,480)

Net proceeds after tax: ₹2,47,520 | Post-tax gain: ₹47,520 on ₹2L invested

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Example 3 - Property LTCG (purchased before July 2023)

Bought property for ₹30L in 2018 | Sold for ₹75L in 2025 | Held: 7 years (LTCG)

Capital Gain = 75,00,000 − 30,00,000 = ₹45,00,000

Tax = 45,00,000 × 12.5% = ₹5,62,500 (no indexation post Budget 2024)

Note: Can save tax by reinvesting in another property (Section 54) or capital gains bonds (Section 54EC) within 6 months.

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❓ Frequently Asked Questions

What is the LTCG tax rate on stocks and equity mutual funds?+

After Budget 2024 (effective 23 July 2024), LTCG on listed equity shares and equity mutual funds held for more than 12 months is taxed at 12.5% (raised from 10%). The first ₹1.25 lakh of LTCG per year is exempt (raised from ₹1 lakh). There is no indexation benefit for equity. The 4% Health and Education Cess applies additionally.

What is the holding period for long-term capital gains?+

Listed equity shares and equity mutual funds: more than 12 months. Debt mutual funds, bonds, gold, and real estate: more than 24 months (2 years). Unlisted shares: more than 24 months. Assets held below these periods attract Short-Term Capital Gains (STCG) which is taxed differently - equity STCG at 20%, others at income slab rate.

Can I offset capital losses against capital gains?+

Yes. Short-term capital losses can be set off against both short-term and long-term capital gains in the same year. Long-term capital losses can only be set off against long-term capital gains. Unabsorbed losses can be carried forward for 8 assessment years, but you must file your ITR by the due date (typically July 31) to preserve this right.

How is capital gains tax on property calculated?+

Property sold after 24 months of purchase attracts LTCG tax at 12.5% without indexation (post July 2024 Budget). If the property was purchased before 23 July 2023, you may choose between 12.5% without indexation or 20% with indexation - whichever results in lower tax. STCG (held ≤24 months) is taxed at your income tax slab rate. Tax can be saved by reinvesting in property (Section 54) or capital gains bonds (Section 54EC).

Are gains from debt mutual funds taxed differently after Budget 2023?+

Yes. For debt mutual funds purchased on or after 1 April 2023, all gains (regardless of holding period) are added to your income and taxed at your applicable slab rate - the earlier LTCG rate of 20% with indexation is no longer available for new purchases. For older debt MF units bought before April 2023, the old rules (20% with indexation for 3+ years) still apply.

What is the difference between STCG and LTCG in India?+

Short-Term Capital Gains (STCG) apply when you sell equity within 12 months (taxed at 20% for equity after Budget 2024). Long-Term Capital Gains (LTCG) apply to equity held 12+ months (taxed at 12.5% above Rs 1.25 lakh exemption after Budget 2024). For debt funds (non-equity), LTCG threshold is 24 months; taxed at applicable slab rate without indexation after 2023.

What is the indexation benefit and how does it reduce capital gains tax?+

Indexation adjusts the cost of acquisition for inflation using the Cost Inflation Index (CII) published by the CBDT. Indexed cost = Original cost x (CII of sale year / CII of purchase year). For debt mutual funds held 3+ years (before April 2023 amendment), this dramatically reduced taxable LTCG. Post-amendment, equity and debt LTCG computation rules differ - verify the applicable rules for your asset class and holding period.

How can I reduce capital gains tax legally in India?+

Legal strategies include: tax-loss harvesting (offsetting gains with losses), holding equity for 12+ months to qualify for LTCG rates, investing LTCG from property in capital gains bonds (Sec 54EC, up to Rs 50 lakh), reinvesting property sale proceeds in a new residential property (Sec 54), and using the Rs 1.25 lakh LTCG exemption on equity every year.

Are mutual fund redemptions subject to capital gains tax?+

Yes. Equity mutual fund redemptions within 12 months incur STCG at 20%. After 12 months, gains above Rs 1.25 lakh are taxed at 12.5% LTCG. Debt fund redemptions (from April 2023 onwards) are taxed at the income slab rate regardless of holding period. SIP redemptions use FIFO (first-in-first-out) for tax calculation.

🔗 Related Calculators

📌 Quick Tips

💡LTCG on equity (stocks/equity mutual funds) above ₹1.25 lakh per year is taxed at 12.5% (from Budget 2024, effective 23 July 2024). Gains up to ₹1.25 lakh are exempt.

💡Indexation benefit for debt mutual funds and property was removed for assets purchased after 23 July 2023 - they now attract 12.5% LTCG without indexation.

💡Tax-loss harvesting: sell loss-making investments before March 31 to offset capital gains from profitable ones, reducing your overall tax liability.