Capital Gains Tax in India FY 2025-26: Shares, Mutual Funds and Property

Equity STCG rate

20%

Held 12 months or less

LTCG rate (all assets)

12.5%

Without indexation

Equity LTCG exemption

₹1.25 lakh

Per financial year, u/s 112A

Loss carry forward

8 years

Return must be filed by the due date

The July 2024 reset: one set of rates for everything

The Finance (No. 2) Act 2024 simplified capital gains from 23 July 2024. Long-term gains on every asset class are now taxed at 12.5% without indexation, short-term gains on listed equity moved from 15% to 20%, and the equity LTCG exemption rose from ₹1 lakh to ₹1.25 lakh. Holding periods were reduced to two categories: 12 months for listed securities and 24 months for everything else. FY 2025-26 is the first full year under these rules.

Holding periods and rates by asset

Listed shares and equity mutual funds

Equity gains are computed per transaction on a first-in-first-out basis for shares held in demat form. Your broker tax P&L and the CAMS or KFintech capital gains statement already do this, but check that the statement uses the post-July 2024 rates and the grandfathered cost for pre-2018 holdings.

Grandfathering for shares bought before 1 February 2018

Equity LTCG was fully exempt until 31 January 2018. To protect gains up to that date, the cost of shares or equity fund units bought before 1 February 2018 is taken as the higher of the actual cost and the lower of the fair market value on 31 January 2018 and the sale price. In effect, only appreciation after 31 January 2018 is taxed.

Debt, hybrid and gold funds

Debt fund units bought on or after 1 April 2023 are deemed short-term under section 50AA no matter how long you hold them, so the gain is added to income and taxed at your slab. Units bought before that date follow the 24-month rule and get 12.5% as long-term, without indexation, if sold on or after 23 July 2024.

Hybrid funds with 35% to 65% in equity, gold ETFs, gold funds, international funds and fund of funds are treated like debt for units bought on or after 1 April 2023, but from 1 April 2025 those held more than 24 months qualify as long-term at 12.5%. Sovereign Gold Bonds redeemed at maturity with the RBI remain exempt.

Property: 12.5% or 20% with indexation

Land and buildings held for more than 24 months are long-term. The default rate is 12.5% on the difference between sale price and actual cost, with no inflation adjustment. Resident individuals and HUFs who acquired the property before 23 July 2024 may instead compute tax at 20% on the gain after indexing the cost with the Cost Inflation Index, and pay whichever is lower. Companies, firms and non-residents get only the 12.5% route.

The pattern is consistent: the longer you have held, the more indexation helps, so properties bought before roughly 2017 usually favour the 20% indexed route, while recent purchases favour 12.5%. Stamp duty value under section 50C is treated as the sale price if it exceeds the actual consideration by more than 10%, so check the circle rate before signing.

Exemptions: sections 54, 54F and 54EC

If you cannot buy the new house before the return due date, deposit the unutilised gain in a Capital Gains Account Scheme account with a bank before 31 July 2026 to keep the exemption alive. Money left in the account after the time limit becomes taxable in the year the limit expires.

Set-off and carry forward of capital losses

Losses are not wasted if you follow the ordering rules. Within the year, a short-term capital loss can be set off against any capital gain, short or long. A long-term capital loss can be set off only against long-term gains. Capital losses cannot be set off against salary, business or other income.

• Unabsorbed losses carry forward for 8 assessment years, but only if the return for the loss year is filed by the due date under section 139(1).
• Carried-forward losses must be reported every year in Schedule CFL, even in years with no gains, or CPC drops them.
• Long-term losses on equity are allowed since AY 2019-20 and can be set off against LTCG on property or gold.
• Losses on crypto cannot be set off against anything, not even other crypto gains, and cannot be carried forward.
• Intraday equity losses are speculative business losses, not capital losses, and set off only against speculative gains for 4 years.

Crypto, ESOPs and other special cases

• Crypto and NFTs: 30% flat tax under section 115BBH on each transfer, no deduction except cost of acquisition, no set-off, and 1% TDS under section 194S deducted by the exchange. Reported in Schedule VDA.
• ESOPs and RSUs: the difference between fair market value and exercise price is taxed as salary perquisite at allotment; the later sale is a capital gain with the FMV as cost. Foreign shares are unlisted for Indian purposes, so 24 months applies.
• Bonus shares: cost is nil, holding period starts from the bonus allotment date. Rights shares: cost is the amount paid.
• Gifts and inheritance: no tax on receipt from relatives; on sale, the previous owner cost and holding period are inherited.
• Non-residents: TDS is deducted on the full sale consideration of property at the applicable rate unless a lower deduction certificate is obtained under section 197. Indexation is not available.

Reporting capital gains in your ITR

Capital gains beyond the small 112A allowance push you to ITR-2, or ITR-3 if you also have business income. Schedule CG asks for gains split by asset type and by quarter, which feeds the advance tax interest computation under section 234C. Schedule 112A requires scrip-wise details for grandfathered holdings, and Schedule CFL carries the loss history.

What to do next

Download your broker tax P&L, mutual fund capital gains statements and, if you sold property, the sale deed and original purchase documents. Run each asset through the capital gains calculator, decide the indexed versus 12.5% route for property, check whether a section 54 or 54EC investment is still within its time limit, and file ITR-2 by the due date so that any losses stay available for the next 8 years.