What is the Capital Gains Tax?
Capital gains tax applies when you sell an asset for more than you paid. The rate depends on the asset and how long you held it. Since the July 2024 budget, India uses simplified rates: 12.5% long-term across most assets, and short-term at 20% for equity or your slab rate for others.
The holding period that makes a gain "long term" is 12 months for listed equity and equity mutual funds, and 24 months for property and unlisted shares.
Formula & worked example
Gain, less any exemption, times the applicable rate:
Tax = (Gain − exemption) × rate
Worked example: equity bought for ₹8,00,000 and sold for ₹15,00,000 after 30 months. The gain is ₹7,00,000 and it is long term. After the ₹1.25 lakh exemption, ₹5.75 lakh is taxable at 12.5% = ₹71,875, leaving net proceeds of ₹14.28 lakh.
How to use this capital gains tax calculator
- Enter the purchase and sale values including brokerage where applicable.
- Set the holding period in months — this decides short vs long term.
- Pick the asset type; thresholds and rates differ between equity, debt and property.
- Read the net proceeds to see what actually reaches your account.
Smart tips
- The ₹1.25 lakh equity LTCG exemption is annual. Booking gains up to that limit each year is a legitimate way to reset your cost basis tax-free.
- Holding equity just past 12 months drops the rate from 20% to 12.5% — often worth a short wait.
- Debt fund gains are taxed at slab rate regardless of holding period for units bought after April 2023.
- Property LTCG can be exempted entirely by reinvesting in another house (Section 54) or in capital gains bonds (Section 54EC, up to ₹50 lakh).
Frequently asked questions
What is the LTCG tax rate in India?
For listed equity and equity funds held over 12 months, 12.5% on gains above ₹1.25 lakh a year. For property and unlisted shares held over 24 months, 12.5% without indexation.
What is the STCG rate on shares?
20% on listed equity and equity mutual funds sold within 12 months. Other short-term gains are added to income and taxed at your slab.
Can I avoid capital gains tax on property?
Section 54 exempts the gain if you buy another residential house within the prescribed window, and Section 54EC allows up to ₹50 lakh into specified bonds within 6 months.
Is indexation still available?
The 2024 budget removed indexation for most assets, replacing it with a flat 12.5% LTCG rate. Property bought before 23 July 2024 has a grandfathering option.
Want the theory behind the numbers? Browse the Money Blog for worked guides.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 30 Sep 2026. How we check these numbers.