Budget 2024 rewrote capital gains tax in India. STCG on equity went from 15% to 20%, LTCG stayed at 12.5% but the exemption increased to ₹1.25 lakh per year. Property lost indexation benefit. This calculator applies the current FY 2025-26 rates for equity, debt MF, property, and gold.
Capital gains tax rates — FY 2025-26
Equity and equity mutual funds
| Type | Holding period | Tax rate | Exemption |
|---|---|---|---|
| STCG | Less than 12 months | 20% + 4% cess | None |
| LTCG | 12 months or more | 12.5% + 4% cess | ₹1,25,000/year |
The ₹1.25 lakh LTCG exemption applies across all equity instruments combined (stocks + equity MF + ETFs) in a financial year. LTCG above ₹1.25L is taxed at 12.5% without indexation.
Debt mutual funds (bought after April 1, 2023)
All gains — regardless of holding period — are taxed at your income slab rate. There is no LTCG benefit for new-era debt MF investments. Debt MFs bought before April 1, 2023 retain the old treatment (LTCG at 20% with indexation for holdings > 36 months).
Property / real estate
| Type | Holding period | Tax rate |
|---|---|---|
| STCG | Less than 24 months | Your income slab rate |
| LTCG | 24 months or more | 12.5% + 4% cess (no indexation from FY 2024-25) |
The removal of indexation for property LTCG (Budget 2024) was the most controversial change. Properties bought before July 23, 2024 can choose the old rate (20% with indexation) or new rate (12.5% without) — whichever is lower. Properties bought after July 23, 2024: new 12.5% rate only.
Gold
| Type | Holding period | Tax rate |
|---|---|---|
| STCG | Less than 24 months | Your income slab rate |
| LTCG | 24 months or more | 12.5% + 4% cess |
Sovereign Gold Bonds (SGB): If held to maturity (8 years), capital gain is fully exempt. Early redemption after 5 years at RBI windows is also exempt. Secondary market sale before maturity is taxed normally.
How to calculate capital gains
Step 1: Sale price − purchase price − transfer expenses = capital gain
Step 2: Classify as STCG or LTCG based on holding period
Step 3: Apply applicable rate (or slab rate for debt MF/property STCG)
Step 4: For equity LTCG, subtract ₹1.25L exemption before applying 12.5%
Step 5: Add 4% cess on the tax amount
Tax-saving strategies (legal)
Tax-loss harvesting: Book losses before March 31 to offset gains. Short-term losses can be set off against both STCG and LTCG. Long-term losses can only offset LTCG.
Yearly LTCG reset: Sell and rebuy equity holdings each year to realise up to ₹1.25L in LTCG tax-free. On a ₹50L portfolio growing at 12%/year, this saves ~₹7,800 in tax annually (₹1.25L × 12.5% × 4% less cess).
Section 54 (property): LTCG on sale of a residential house is exempt if you buy/construct another residential house within 2 years (or 3 years if constructing). Applies to one house purchase per transaction.
Section 54EC (bonds): LTCG from property can be invested in NHAI/REC bonds (6-month lock-in, 5-year tenure) to claim exemption up to ₹50 lakh.
Worked example: Selling ₹5 lakh equity MF after 18 months
- Purchase price: ₹3,50,000
- Sale price: ₹5,00,000
- Holding: 18 months → LTCG
- Capital gain: ₹1,50,000
- Exemption: ₹1,25,000
- Taxable gain: ₹25,000
- Tax: ₹25,000 × 12.5% × 1.04 = ₹3,250
Frequently asked questions
Do I need to pay advance tax on capital gains?
Yes, if your total tax liability (including capital gains tax) exceeds ₹10,000 in a year. Pay in four instalments: 15% by June 15, 45% by September 15, 75% by December 15, 100% by March 15. Capital gains realised after March 15 can be paid in full by March 31 without interest.
How is LTCG on property calculated post-Budget 2024?
For property purchased before July 23, 2024: you can choose whichever gives a lower tax — old method (20% with CII indexation) or new method (12.5% without indexation). Use both calculations and pick the one that saves you more. For property bought on or after July 23, 2024: 12.5% without indexation only.
Are ELSS mutual fund gains taxed?
Yes. ELSS funds are equity funds with a 3-year lock-in. On redemption, gains are treated as LTCG (held > 12 months) — taxed at 12.5% above ₹1.25L exemption, same as any other equity MF.
Where do I report capital gains in ITR?
Schedule CG in ITR-2 (if you have no business income) or ITR-3 (business income). Equity MF gains are auto-populated from Form 26AS and AIS; property gains require manual entry. Always verify AIS before filing.
Sources
- Finance Act 2024: Budget 2024 capital gains tax amendments
- CBDT Circular on transitional provisions for property LTCG (July 2024)
- Income Tax Act 1961: Sections 54, 54EC, 54F, 112A, 111A
- SEBI: Equity MF LTCG reporting guidelines