Capital Gains · FY 2025-26

LTCG Tax in India
12.5% After 23 July 2024

How long-term capital gains on listed shares, equity & debt mutual funds, property, gold and unlisted shares are taxed after the Budget 2024 overhaul — the 12.5% rate, holding periods, the ₹1.25 lakh equity exemption, the indexation option and Section 54 reliefs.

Updated for AY 2026-27 CA reviewed Post Budget 2024 regime

File ITR with a CA See the rate table

12.5%LTCG rate (equity/property)

₹1.25 LEquity yearly exemption

24 moProperty / gold long-term

SlabDebt funds post-Apr-2023

Quick Answer

Long-term capital gains (LTCG) are taxed at 12.5% under the regime effective 23 July 2024. On listed equity shares and equity mutual funds (held over 12 months) the 12.5% applies on gains above a ₹1.25 lakh yearly exemption, with no indexation (Section 112A). On property, gold and unlisted shares (held over 24 months) it is 12.5% without indexation — but land or buildings acquired before 23 July 2024 keep the option of 20% with indexation. Debt mutual funds bought on/after 1 April 2023 are always taxed at slab rates. Rates are unchanged for FY 2025-26.

Equity LTCG 12.5%

Equity exemption ₹1.25 L

Property/gold 12.5%

Debt MF Slab

All asset classes

LTCG Tax Rates by Asset — FY 2025-26

The Budget 2024 overhaul standardised LTCG at 12.5% and cut indexation for most assets from 23 July 2024. Short-term rules and holding periods still differ by asset.

Asset	Long-term after	LTCG rate	Indexation	Exemption
Listed equity shares	> 12 months	12.5%	No	₹1.25 L/yr u/s 112A
Equity mutual funds (≥65% equity)	> 12 months	12.5%	No	₹1.25 L/yr (combined) u/s 112A
Residential / commercial property	> 24 months	12.5%	Option*	54 / 54EC / 54F
Gold, jewellery, gold funds	> 24 months	12.5%	No	54F (reinvest in house)
Unlisted shares	> 24 months	12.5%	No	—
Debt MF bought on/after 1 Apr 2023	Any	Slab	No	—
Debt MF bought before 1 Apr 2023	> 24 months	12.5%	No	—

*Land / building acquired before 23 Jul 2024: taxpayer may choose 20% with indexation (CII FY26 = 376) or 12.5% without — whichever is lower. New acquisitions: 12.5% only. Verified on incometax.gov.in for FY 2025-26 (AY 2026-27).

The 23 July 2024 change — one date, two big shifts

The Finance Act 2024 (a) raised equity LTCG from 10% to 12.5% and lifted the exemption from ₹1 lakh to ₹1.25 lakh, and (b) cut the LTCG rate on property/gold/unlisted from 20% to 12.5% but removed indexation. Transfers up to 22 July 2024 follow the old rules; from 23 July 2024 the new rates apply. Only land and buildings acquired before that date retain the 20%-with-indexation option.

Short vs long

Holding Period & STCG vs LTCG

Whether a gain is short-term or long-term depends on how long you held the asset. The threshold is 12 months for listed securities and 24 months for property, gold and unlisted shares.

20%

Equity STCG (u/s 111A)

Listed shares / equity MF held 12 months or less
Flat 20% for transfers on/after 23 Jul 2024 (was 15%)
No ₹1.25 lakh exemption — applies to LTCG only
See Section 111A

12.5%

Equity LTCG (u/s 112A)

Listed shares / equity MF held over 12 months
First ₹1.25 lakh of gains exempt each year
12.5% on the balance, no indexation
Grandfathering protects gains up to 31 Jan 2018

Asset	Short-term if	STCG rate	Long-term if	LTCG rate
Listed equity / equity MF	≤ 12 months	20%	> 12 months	12.5%
Property / land	≤ 24 months	Slab	> 24 months	12.5%
Gold & unlisted shares	≤ 24 months	Slab	> 24 months	12.5%
Debt MF (post 1 Apr 2023)	Any	Slab	—	Slab

STCG on non-equity assets and on post-Apr-2023 debt funds is added to income and taxed at your slab rate.

Debt mutual funds lost the LTCG benefit

Units of specified (debt-heavy) mutual funds bought on or after 1 April 2023 are always taxed at slab rates with no long-term benefit and no indexation, under the Finance Act 2023. Only units bought before 1 April 2023 and held over 24 months still get the 12.5% LTCG rate (without indexation post-July-2024). See our mutual fund tax guide.

Worked examples

How the LTCG Tax Is Calculated

Two common cases — equity with the ₹1.25 lakh exemption, and property where you compare the 12.5% and 20%-with-indexation options.

Equity LTCG u/s 112A

Total equity LTCG₹3,25,000

Less: yearly exemption₹1,25,000

Taxable LTCG₹2,00,000

Tax @ 12.5%₹25,000

Tax payable (+cess)≈ ₹26,000

Property bought pre-23-Jul-2024

Option A: 12.5% (no index.)₹12,50,000 gain

Tax @ 12.5%₹1,56,250

Option B: 20% (indexed)₹9,00,000 gain

Tax @ 20%₹1,80,000

Pick the lower₹1,56,250

Add 4% health & education cess (and surcharge if applicable). For equity, only the amount above ₹1.25 lakh is taxed; for old property, compute both options and pay the lower. Estimate with the income-tax calculator or the capital gains calculator.

TaxClue Insight — LTCG is a flat special rate

112A/112 LTCG is taxed at a flat rate regardless of your slab, and the 80C and most Chapter VI-A deductions do not reduce it. The Section 87A rebate also does not apply to 112A gains. Your choice between old and new regime affects your salary/business income, not the 12.5% — see the new tax regime guide.

Save the tax

LTCG Exemptions & Loss Set-off

For property and other long-term assets you can reinvest to defer or wipe out the gain. Losses have their own set-off rules.

Section	Covers	Reinvest in	Lock-in
Section 54	LTCG on a residential house	New residential house (1yr before / 2–3yr after)	3 years
Section 54EC	LTCG on land / building	NHAI / REC bonds up to ₹50L within 6 months	5 years
Section 54F	LTCG on any asset (not a house)	A residential house (net proceeds)	3 years

Section 54B (agricultural land) and 54GB (start-up) offer further reliefs. Reinvest within the window and, where needed, park funds in a Capital Gains Account Scheme before the ITR due date.

Long-term capital loss can be set off only against long-term capital gains — from equity, property or debt.
A short-term loss can be set off against both STCG and LTCG; a long-term loss cannot touch STCG.
Unabsorbed capital losses can be carried forward for 8 assessment years.
To carry a loss forward you must file your ITR by the due date.

You can cut LTCG tax if

You reinvest property gains under 54/54EC/54F
You harvest the ₹1.25 lakh equity exemption yearly
You book equity losses to offset LTCG

Be careful because

The ₹1.25 lakh exemption does not carry forward
54EC bonds are capped at ₹50 lakh and locked 5 years
Missing the ITR due date forfeits loss carry-forward

Sold shares, property or mutual funds this year? Get your capital gains computed and filed correctly.

File ITR with a CA →

Government sourcesSections 112A, 111A, 112 & 54-series, Income-tax Act: incometax.gov.in · Capital-gains regime (Finance Act 2024, eff. 23 Jul 2024): equity 12.5%/₹1.25L, property/gold 12.5% · Debt MF at slab (Finance Act 2023, units from 1 Apr 2023); CII FY26 = 376 for the 20% indexation option · From AY 2026-27 the Income-tax Act 2025 re-enacts these capital-gains rules

Frequently Asked Questions

Equity & Mutual Funds

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

12.5% under Section 112A on long-term gains above ₹1.25 lakh in a year, without indexation, for listed equity shares and equity mutual funds held more than 12 months. This rate applies to transfers on or after 23 July 2024 (Budget 2024) and continues for FY 2025-26. Before that the rate was 10% with a ₹1 lakh exemption. Add 4% health and education cess.

How much LTCG on shares is tax-free?

The first ₹1.25 lakh of long-term capital gains from listed equity shares, equity mutual funds and business-trust units is exempt every financial year. Only the gain above ₹1.25 lakh is taxed at 12.5%. The exemption is a single combined threshold across all such gains, not per scrip or per fund, and it does not carry forward if unused.

How do I calculate LTCG on shares with an example?

Take sale value minus cost of acquisition for shares held over 12 months. For shares bought before 1 February 2018, cost is grandfathered to the higher of actual cost or the lower of the 31-Jan-2018 fair market value and the sale price. Subtract the ₹1.25 lakh exemption from your total 112A gain, then apply 12.5%. Example: ₹3,25,000 gain − ₹1,25,000 = ₹2,00,000 taxed at 12.5% = ₹25,000 plus cess.

Is indexation available on equity LTCG?

No. Section 112A never allowed indexation on listed equity shares or equity mutual funds. The 12.5% is applied to the plain gain after grandfathering for pre-2018 holdings. Indexation was also withdrawn for most other assets from 23 July 2024, with a limited option surviving only for land and buildings acquired before that date.

Is LTCG under 112A added to my slab income?

No. LTCG under Section 112A is special-rate income taxed at a flat 12.5% and is not added to your slab-rate income. The Section 87A rebate cannot be used against it. For instance, salary of ₹11 lakh that pays nil tax after the rebate plus ₹3 lakh equity LTCG still means the taxable ₹1.75 lakh of LTCG is taxed at 12.5%, regardless of the salary.

Property

What is the LTCG tax on property sale?

Property held more than 24 months is taxed at 12.5% without indexation under Section 112 from 23 July 2024. However, if the land or building was acquired before 23 July 2024, you may choose either 12.5% without indexation or 20% with indexation (using CII 376 for FY 2025-26) — whichever gives the lower tax. New purchases only get the 12.5% rate.

Can I still use indexation on property?

Only for land or buildings acquired before 23 July 2024. Such property retains the option of 20% tax with indexation, and you pay the lower of that or 12.5% without indexation. For property acquired on or after 23 July 2024, and for gold, unlisted shares and most other assets, indexation is no longer available and the rate is 12.5%.

How can I save LTCG tax on property sale?

Reinvest under the 54-series. Section 54 exempts gains on a residential house if you buy or build another house within the prescribed window. Section 54EC lets you invest up to ₹50 lakh in NHAI or REC bonds within 6 months (5-year lock-in). Section 54F applies when you sell a non-house asset and buy a house. Park unused proceeds in a Capital Gains Account Scheme before the ITR due date.

What is the holding period for LTCG on property?

More than 24 months. Immovable property (land, residential or commercial building) held for over 24 months qualifies as long-term and is taxed at 12.5% under Section 112. If held for 24 months or less, the gain is short-term and added to your income at slab rates.

Other Assets

How are debt mutual funds taxed now?

Units of specified debt mutual funds bought on or after 1 April 2023 are always taxed at your slab rate with no long-term benefit and no indexation, under the Finance Act 2023. Units bought before 1 April 2023 and held for more than 24 months still get the 12.5% LTCG rate (without indexation after 23 July 2024). Short holdings are taxed at slab rates.

What is the LTCG tax on gold and jewellery?

Physical gold, jewellery and gold funds held for more than 24 months are taxed at 12.5% without indexation from 23 July 2024 (earlier 20% with indexation). If held for 24 months or less, the gain is short-term and taxed at slab rates. You can claim Section 54F if you reinvest the net proceeds in a residential house.

How are unlisted shares taxed on sale?

Unlisted shares held for more than 24 months are long-term and taxed at 12.5% under Section 112 without indexation. Held for 24 months or less, the gain is short-term and added to income at slab rates. The ₹1.25 lakh Section 112A exemption does not apply to unlisted shares — that exemption is only for STT-paid listed equity and equity mutual funds.

How is LTCG on Sovereign Gold Bonds taxed?

For individuals, the capital gain on redemption of a Sovereign Gold Bond at maturity is fully exempt from tax. If you sell an SGB in the secondary market instead, the long-term gain (held over 12 months) is taxed at 12.5%. The 2.5% annual interest on SGBs is always taxable at your slab rate. Note that the RBI has not issued new SGB tranches recently, though existing bonds continue as normal.

Losses & Filing

How are capital losses set off against LTCG?

A long-term capital loss can be set off only against long-term capital gains — from equity, property or debt. A short-term loss can be set off against both short-term and long-term gains. Neither can be set off against other heads such as salary. Unabsorbed capital losses carry forward for 8 assessment years, provided you file the ITR by the due date.

Which ITR form do I use for LTCG?

ITR-2 (or ITR-3 for those with business income) reports capital gains, with 112A equity gains in Schedule 112A. ITR-1 (Sahaj) now allows a resident to report LTCG under Section 112A up to ₹1.25 lakh for AY 2025-26 onward. TaxClue can compute your gains — grandfathering, the indexation option, set-off and exemptions — and file the return with a CA reviewing the capital-gains schedule.

Is LTCG tax the same in the old and new tax regime?

Yes. LTCG is charged at the same special rate (12.5% on most long-term assets) under both the old and the new regime — the regime choice only affects how your slab income is taxed. Choosing a regime does not change the capital-gains rate, and most deductions cannot reduce these gains.

Done-for-you

Related TaxClue Services

Income Tax Return FilingCA-assisted ITR with your capital-gains schedule computed correctly.Explore →Capital Gains ComputationFull LTCG/STCG working with grandfathering, indexation option and set-off.Explore →Capital Gains CalculatorEstimate LTCG on shares, property or gold in minutes.Explore →TDS on PropertyBuyer TDS u/s 194-IA and the seller's capital-gains position, sorted.Explore →

Next in this capital-gains cluster

Section 112A — LTCG on Equity Section 111A — STCG on Equity Section 54 — House Property Exemption Section 54EC — Capital Gain Bonds Section 54F — Sale of Any Asset Mutual Fund Taxation

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