How are capital gains taxed in India?

⚡ Short answerCapital gains tax depends on the asset and holding period. For listed equity and equity mutual funds, gains within 12 months are short-term (STCG) taxed at 20%, and beyond 12 months are long-term (LTCG) taxed at 12.5% above a ₹1.25 lakh annual exemption. Property and unlisted assets held over 24 months are long-term, taxed at 12.5% without indexation (with grandfathering options).

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Equity shares and mutual funds

STCG under Section 111A is 20% (for transfers on or after 23 July 2024). LTCG under Section 112A is 12.5% on gains above ₹1.25 lakh per year. Securities Transaction Tax must have been paid.

Property and other assets

Immovable property and unlisted assets become long-term after 24 months, taxed at 12.5%. For property acquired before 23 July 2024, taxpayers can choose 12.5% without indexation or 20% with indexation — whichever is lower.

Related questions

What is the LTCG exemption on shares?

Long-term capital gains on listed equity and equity mutual funds are exempt up to ₹1.25 lakh per financial year under Section 112A. Gains above that are taxed at 12.5%.

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General information for AY 2026-27, not professional advice. Rules change with each Finance Act / notification and depend on your facts — verify with a licensed CA or advocate before acting.