Frequently Asked Questions
What is the LTCG tax rate on equity shares in FY 2025-26?
Long-term capital gains (LTCG) on listed equity shares and equity mutual funds where STT has been paid are taxed at 12.5% on gains exceeding ₹1.25 lakh under Section 112A, as per Finance Act 2024. The holding period for LTCG is more than 12 months. Add 4% health and education cess on the basic tax.
What is the STCG rate on equity after Finance Act 2024?
Short-term capital gains (STCG) on listed equity and equity mutual funds (STT paid, held ≤ 12 months) under Section 111A are taxed at 20% as per Finance Act 2024. This was raised from the earlier rate of 15%. Add 4% cess.
What is the ₹1.25 lakh LTCG exemption on equity?
Under Section 112A, LTCG on listed equity and equity mutual funds up to ₹1.25 lakh per financial year is exempt. Gains above ₹1.25 lakh are taxed at 12.5%. The exemption was increased from ₹1 lakh in Union Budget 2024. This limit is shared across all equity LTCG in the FY — if you sold multiple scrips, the exemption applies to total LTCG.
How does grandfathering work for equity purchased before 31 Jan 2018?
For equity shares and mutual funds purchased before 31 January 2018, the deemed cost of acquisition is the higher of: (a) actual purchase price, or (b) FMV (closing price / NAV) on 31 Jan 2018 — subject to the condition that deemed cost cannot exceed the actual sale price. This ensures gains that accrued before LTCG was reintroduced in 2018 are not taxed. You can find the FMV from NSE/BSE historical data or the mutual fund's NAV on 31 Jan 2018.
Can I use indexation on property sold after 23 July 2024?
For property acquired before 23 July 2024 and sold after that date, you may choose whichever option gives lower tax: (1) 12.5% LTCG without indexation, or (2) 20% LTCG with indexation using the Cost Inflation Index (CII). This calculator automatically picks the lower-tax option when you select "Acquired before 23 Jul 2024". For property acquired on or after 23 July 2024, only 12.5% without indexation applies.
What is the capital gains tax on debt mutual funds?
Under Finance Act 2023, debt mutual funds acquired after 31 March 2023 are taxed at your income slab rate regardless of holding period — there is no LTCG/STCG distinction, and no indexation benefit. This applies to all debt MFs, liquid funds, overnight funds, and most hybrid funds with equity < 65%. The gain is added to your total income and taxed at the applicable slab rate.