Capital gains tax rates after 23 July 2024
Budget 2024 simplified capital gains taxation for transfers made on or after 23 July 2024, and these rates continue for FY 2025-26. Long-term gains on almost every asset are now taxed at 12.5% without indexation, while short-term gains on listed equity and equity mutual funds are taxed at 20%. Other short-term gains are added to your income and taxed at slab rates.
- Health and education cess of 4% is added to every rate above.
- Surcharge on gains under sections 111A and 112A is capped at 15% even for incomes above ₹2 crore.
- The ₹1.25 lakh exemption is per financial year, across all equity shares and equity funds together.
| Asset | Long-term after | STCG rate | LTCG rate |
|---|---|---|---|
| Listed shares, equity MFs, equity ETFs (STT paid) | 12 months | 20% (s.111A) | 12.5% above ₹1.25 lakh (s.112A) |
| Debt mutual funds bought on or after 1 Apr 2023 | Never (s.50AA) | Slab rate | Slab rate |
| Debt funds bought before 1 Apr 2023 | 24 months | Slab rate | 12.5% |
| House, flat, land | 24 months | Slab rate | 12.5%, or 20% with indexation if bought before 23 Jul 2024 |
| Gold, unlisted shares, bonds, REIT/InvIT units | 24 months (12 for listed bonds/units) | Slab rate | 12.5% |
| Crypto and other virtual digital assets | Not applicable | 30% flat (s.115BBH) | 30% flat |
How the calculator classifies your gain
The calculator counts the holding period from the purchase date to the sale date and compares it with the limit for the asset: 12 months for listed equity, 24 months for property and most other assets. If the asset was held for more than that period the gain is long-term. Capital gain is sale price minus transfer expenses (brokerage, STT is not deductible, stamp duty, legal fees) minus cost of acquisition, plus any cost of improvement for property.
For debt mutual funds the purchase date matters more than the holding period: units bought on or after 1 April 2023 are always taxed at slab rate under section 50AA, whichever year you sell. For property bought before 23 July 2024, resident individuals and HUFs may choose the older 20% rate with indexation if it produces less tax; the calculator computes both and applies the lower.
Worked example: shares and equity mutual funds
Long-term: you bought equity mutual fund units for ₹5,00,000 in January 2023 and redeemed them for ₹8,00,000 in August 2025. Held more than 12 months, so the ₹3,00,000 gain is long-term. Subtract the ₹1,25,000 exemption, leaving ₹1,75,000 taxable at 12.5% = ₹21,875, plus 4% cess ₹875, total ₹22,750.
Short-term: the same ₹3,00,000 gain on shares sold within 12 months is taxed at 20% = ₹60,000, plus cess ₹2,400, total ₹62,400. No exemption applies to short-term gains, and the basic exemption limit can be used only by residents whose other income is below it.
Shares bought before 1 February 2018 use the higher of the actual cost and the fair market value on 31 January 2018 as cost (the grandfathering rule), which is why long-term gains on very old holdings are often smaller than the raw sale price suggests.
Worked example: property bought before 23 July 2024
You bought a flat in FY 2010-11 for ₹30,00,000 and sell it in FY 2025-26 for ₹90,00,000 with ₹1,00,000 of brokerage. Cost Inflation Index is 167 for 2010-11 and 376 for 2025-26.
Option 1, 12.5% without indexation: gain = ₹90,00,000 − ₹1,00,000 − ₹30,00,000 = ₹59,00,000. Tax = ₹7,37,500 plus cess ₹29,500 = ₹7,67,000.
Option 2, 20% with indexation: indexed cost = ₹30,00,000 × 376 ÷ 167 = ₹67,54,491. Indexed gain = ₹89,00,000 − ₹67,54,491 = ₹21,45,509. Tax = ₹4,29,102 plus cess ₹17,164 = ₹4,46,266. The indexed option is lower by over ₹3.2 lakh, so the calculator applies it. For property bought recently, where prices have not outrun inflation, the 12.5% route usually wins.
Property bought before 1 April 2001 can use its fair market value on that date as cost, subject to the stamp duty value on that date. If the sale price is below the stamp duty value by more than 10%, the stamp duty value is treated as the sale price under section 50C.
Exemptions that can reduce property and other gains
- Section 54: long-term gain from a residential house reinvested in one new residential house in India (two houses once in a lifetime if the gain is up to ₹2 crore) within 1 year before or 2 years after sale, or constructed within 3 years. Exemption capped at ₹10 crore.
- Section 54F: long-term gain from any asset other than a house, where the whole net sale consideration is invested in a residential house; you must not own more than one other house on the sale date.
- Section 54EC: up to ₹50 lakh of gain from land or building invested in REC, PFC, IRFC or NHAI bonds within 6 months; 5-year lock-in, interest taxable.
- Capital Gains Account Scheme: park unspent amounts in a CGAS account before the ITR due date to keep the exemption while you find a property.
- None of these apply to short-term gains or to equity gains under section 112A, except 54F for reinvesting in a house.
Losses, set-off and carry forward
Short-term capital loss can be set off against any capital gain, short or long-term. Long-term capital loss can be set off only against long-term gains. Losses that cannot be absorbed this year can be carried forward for 8 assessment years, but only if the return is filed by the due date under section 139(1). Capital losses cannot be set off against salary, business or other income, and the ₹1.25 lakh equity exemption is applied after set-off, so booking losses before March can save real tax.
Reporting and paying tax on capital gains
Capital gains go in Schedule CG of ITR-2 (or ITR-3 if you also have business income); ITR-1 allows only long-term equity gains up to ₹1.25 lakh with no loss to carry forward. Since no TDS is deducted on gains by Indian residents, tax must be paid as advance tax in the instalment following the sale; a gain in November, for instance, is payable with the 15 December instalment. Reconcile your broker's capital gains statement and mutual fund CAS with the AIS before filing, because mismatches trigger notices. Buyers of property from an NRI deduct TDS under section 195 on the whole consideration unless a lower-deduction certificate is obtained.