Tax · Equity tax explained
LTCG & STCG Capital Gains
After Budget 2024-25, capital gains rates changed materially: STCG on equity rose 15% → 20%, LTCG on equity rose 10% → 12.5% (with ₹1.25L exemption), and indexation benefit was REMOVED for debt MFs (post-Apr 2023) and real estate (post-Jul 2024). Holding-period definition matters: 12 months for listed equity, 24 months for unlisted, 24 months for property.
Who needs this
Anyone selling equity, mutual funds, real estate, gold, crypto, or unlisted shares. Mandatory disclosure in ITR-2/ITR-3 (not ITR-1). Loss-set-off rules require careful tracking.
Key dates
- LTCG harvesting windowBest done Feb-Mar each FY
- ITR-2/ITR-3 filingJul 31, 2026
- Section 54/54F reinvestment2 yr (purchase) / 3 yr (construction)
Key decisions
- Q1
When does LTCG kick in for equity?
Listed equity / equity MF: held > 12 months → LTCG 12.5% on gains > ₹1.25L. Unlisted equity / debt MF / property: held > 24 months → LTCG (rates vary). Below threshold: STCG.
- Q2
Can I offset losses?
STCG losses: against any STCG or LTCG within same year. LTCG losses: ONLY against LTCG. Carry forward 8 years. F&O loss is non-speculative business loss (separate rules).
- Q3
Should I harvest the ₹1.25L LTCG annually?
Yes — sell + immediately rebuy equity worth up to ₹1.25L gains/year to reset cost basis tax-free. Saves ₹15K/year tax (12.5% × ₹1.25L). Common 'tax harvesting' practice in Mar/Apr.
- Q4
Real estate post-Jul 2024 sale?
12.5% flat (no indexation). Pre-2024 properties get grandfathered 20%-with-indexation OR 12.5%-without (taxpayer's choice). Section 54 reinvestment exemption still applies.
CBDT rules + tax-act references
- Equity STCG: 20% (was 15% pre-Jul 2024).
- Equity LTCG: 12.5% on gains > ₹1.25L (was 10% on gains > ₹1L pre-Jul 2024).
- Debt MF (post-Apr 2023): no indexation, taxed at slab rate as STCG regardless of holding period.
- Property (post-Jul 2024): 12.5% flat. Pre-2024: choice between 20%-indexed or 12.5%-unindexed.
- F&O: business income, slab rate, audit if turnover > thresholds.
Calculators
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