Budget 2024 revised capital gains tax rates effective FY 2025-26: LTCG on equity at 12.5% (₹1.25 lakh exempt per year), STCG on equity at 20%, property LTCG at 12.5% without indexation. This guide covers holding periods, tax rate tables, step-by-step calculation for shares and mutual funds, all capital gains exemptions (Section 54, 54EC, 54F), NRI rules, surcharge, and the CII indexation table.
Capital Gains Tax Rates — All Asset Classes
LTCG Exemption Limit FY 2025-26 — ₹1.25 Lakh
Holding Periods — STCG vs LTCG by Asset Class
How to Calculate Capital Gains Tax
Cost Inflation Index Table — FY 2001-02 to FY 2024-25
Capital Gains on Mutual Funds — Calculation
Calculation Examples — Equity, Property, Gold
Budget 2024 Changes — What Changed & When
Surcharge on Capital Gains Tax
Tax Exemptions — Sections 54, 54EC, 54F, 54B
Capital Gains Tax for NRI in India
Section 87A Rebate on Capital Gains
ITR Filing for Capital Gains (ITR-2)
What is Capital Gain Tax?
FAQs on Capital Gains Tax FY 2025-26
Budget 2024 revised capital gains tax rates effective July 23, 2024 (FY 2024-25 onwards). The following rates apply for FY 2025-26 (AY 2026-27):
LTCG Rates — Long-Term Capital Gains FY 2025-26
| Asset Class | Holding Period for LTCG | LTCG Tax Rate | Exemption | Indexation |
|---|---|---|---|---|
| Equity shares & equity MF (Section 112A) | > 12 months | 12.5% | ₹1.25 lakh per year | No |
| Immovable property (acquired before Jul 23, 2024) | > 24 months | 20% with indexation OR 12.5% — whichever is lower | None (Section 54 applies) | Optional |
| Immovable property (acquired after Jul 23, 2024) | > 24 months | 12.5% | None (Section 54 applies) | No |
| Unlisted shares | > 24 months | 12.5% | None | No |
| Debt mutual funds (purchased before Apr 1, 2023) | > 36 months | 12.5% | None | No |
| Gold / jewellery / other assets | > 24 months | 12.5% | None | No |
STCG Rates — Short-Term Capital Gains FY 2025-26
| Asset Class | STCG Tax Rate | Note |
|---|---|---|
| Equity shares & equity MF with STT paid (Section 111A) | 20% | Section 87A rebate NOT available on this tax |
| Equity shares & equity MF without STT (off-market) | As per income tax slab | Normal slab rates apply |
| Immovable property | As per income tax slab | Added to total income, taxed at slab rate |
| Debt mutual funds (purchased after Apr 1, 2023) | As per income tax slab | Always treated as STCG regardless of holding |
| Gold / jewellery / other assets | As per income tax slab | Slab rates apply for holding ≤ 24 months |
| Virtual Digital Assets (Crypto) — Section 115BBH | 30% flat (no LTCG/STCG distinction) | 1% TDS. No set-off of losses allowed. |
Under Section 112A, long-term capital gains from listed equity shares, equity-oriented mutual funds, and units of business trusts are exempt up to ₹1.25 lakh per financial year. Only gains above this threshold are taxed at 12.5%.
How the ₹1.25 Lakh LTCG Exemption Works
| Scenario | Taxable LTCG | Tax @ 12.5% |
|---|---|---|
| LTCG on equity of ₹80,000 | ₹0 (fully within ₹1.25L limit) | ₹0 |
| LTCG on equity of ₹1,25,000 | ₹0 (exactly at limit) | ₹0 |
| LTCG on equity of ₹2,00,000 | ₹75,000 (₹2L − ₹1.25L) | ₹9,375 + 4% cess = ₹9,750 |
| LTCG on equity of ₹5,00,000 | ₹3,75,000 (₹5L − ₹1.25L) | ₹46,875 + 4% cess = ₹48,750 |
| LTCG on equity of ₹10,00,000 | ₹8,75,000 (₹10L − ₹1.25L) | ₹1,09,375 + 4% cess = ₹1,13,750 |
Key Rules for the ₹1.25 Lakh Exemption
Per financial year limit — ₹1.25 lakh is the cumulative exemption across all equity LTCG in a single FY. Not per transaction or per stock.
Only for Section 112A assets — listed equity shares, equity-oriented MF, units of business trusts (InvITs/REITs with STT paid).
Budget 2024 change — raised from ₹1 lakh to ₹1.25 lakh effective July 23, 2024.
Section 87A rebate NOT available on the taxable LTCG under Section 112A — even if total income is below ₹12 lakh.
Grandfathering rule — for shares held before February 1, 2018, cost of acquisition = higher of (actual cost) or (Fair Market Value as of January 31, 2018).
Harvesting strategy — realising up to ₹1.25L in LTCG each year and re-buying resets the cost basis, reducing future tax liability.
Capital gains tax on mutual fund redemption depends on the type of fund (equity vs debt) and the holding period. Here is a step-by-step calculation for both equity and debt mutual funds.
Step 1: Identify Fund Type and Holding Period
| Fund Type | Holding ≤ 12 months | Holding > 12 months |
|---|---|---|
| Equity MF (≥65% in equity) | STCG @ 20% (Section 111A) | LTCG @ 12.5% above ₹1.25L (Section 112A) |
| Hybrid / Balanced Advantage MF | STCG @ 20% if equity ≥65%; else slab rate | LTCG @ 12.5% if equity ≥65%; else 12.5% |
| Debt MF (purchased after Apr 1, 2023) | Slab rate (always) | Slab rate (always — no LTCG treatment) |
| Debt MF (purchased before Apr 1, 2023) | ||
| International / Fund of Funds |
Equity Mutual Fund LTCG — Calculation Example
Example: SIP investment in equity MF
SIP units purchased over 3 years — units held for > 12 months qualify as LTCG
Total purchase cost (cost of acquisition): ₹4,00,000
Redemption value: ₹6,50,000
Gross LTCG: ₹2,50,000
Less: ₹1.25 lakh exemption (Section 112A)
Taxable LTCG: ₹1,25,000
Tax @ 12.5% = ₹15,625 + 4% cess = ₹16,250 net tax
Note: Units held < 12 months are STCG at 20% — calculate separately for each tranche
Example: Debt MF (purchased after April 1, 2023)
Purchase: ₹5,00,000 in March 2024
Redemption: ₹5,80,000 in September 2025 (held 18 months)
Gain: ₹80,000 — treated as income at slab rate regardless of holding period
If in 30% slab: ₹80,000 × 30% = ₹24,000 + cess = ₹24,960
Debt MF purchased after April 1, 2023 always taxed at slab rate
Budget 2024 (Union Budget, July 2024) made the most significant changes to India's capital gains tax structure in years. Changes apply from July 23, 2024 — the date of the Budget announcement.
Before vs After Budget 2024 — Key Changes
| Parameter | Before Jul 23, 2024 | After Jul 23, 2024 |
|---|---|---|
| STCG on equity/equity MF (Sec 111A) | 15% | 20% |
| LTCG on equity/equity MF (Sec 112A) | 10% | 12.5% |
| LTCG exemption on equity | ₹1,00,000 | ₹1,25,000 |
| LTCG on property (for new acquisitions) | 20% with indexation | 12.5% without indexation |
| Holding period — property LTCG | 24 months | 24 months (unchanged) |
| Indexation on property | Available (CII applied) | Removed for post-Jul 23, 2024 acquisitions; optional for pre-Jul 23, 2024 |
| LTCG on unlisted shares | 20% with indexation | 12.5% without indexation |
| LTCG on gold / other assets | 20% with indexation | 12.5% without indexation |
Property Sold in FY 2025-26 — Which Rate Applies?
Property acquired before July 23, 2024: Choose the option giving lower tax — (a) 20% with indexation using CII, or (b) 12.5% without indexation. Calculate both and pay the lower.
Property acquired on or after July 23, 2024: Only 12.5% without indexation applies. No choice available.
CII for FY 2024-25: 363 (as notified by CBDT via S.O. 1692(E)). Use this for indexation when the asset was sold in FY 2024-25. The CII for FY 2025-26 will be separately notified by CBDT.
This choice applies only to individuals and HUFs. Companies must use 12.5% without indexation.
The Income Tax Act provides several exemptions that allow you to save capital gains tax by reinvesting the sale proceeds. Here are the conditions for each:
Capital Gains Exemption Sections — Comparison Table
| Section | Applicable Asset | Reinvestment In | Time Limit | Max Exemption | Lock-in |
|---|---|---|---|---|---|
| Section 54 | Residential house property (LTCG) | New residential house in India | Purchase: 1 year before or 2 years after sale. Construction: 3 years | ₹10 crore | 3 years |
| Section 54B | Agricultural land (urban — STCG or LTCG) | New agricultural land | Within 2 years of sale | Full LTCG / STCG amount | 3 years |
| Section 54EC | Any long-term capital asset (land, building) | Specified bonds: NHAI, REC (within 6 months) | Within 6 months of sale | ₹50 lakh per FY | 5 years |
| Section 54F | Any long-term capital asset (not house property) | Residential house property | Purchase: 1 year before or 2 years after. Construction: 3 years | Proportional (based on % of proceeds invested) | 3 years |
| Section 54GB | Residential house property (LTCG) | Shares in eligible startup company | Within 1 year before or after transfer | Full LTCG amount | 5 years |
Capital Gains Account Scheme (CGAS)
If you cannot invest the capital gains before the ITR filing date, deposit the amount in a Capital Gains Account Scheme (CGAS) with any nationalised bank.
The deposit preserves the exemption — you can then invest (buy house/bonds) within the time limit from the actual sale date.
Unutilised CGAS amount after the time limit is treated as LTCG and taxed in that year.
Interest earned on CGAS is taxable as income from other sources.
Capital Gains Tax is a tax imposed on the profit realized from the sale of a capital asset. These profits are added to your total income and taxed at specific rates.
Important Points About Capital Gains Tax
It applies when you sell a capital asset and make a profit
The tax is levied in the financial year when the asset is transferred
The tax rate varies based on the holding period of the asset
Different assets have different holding period criteria
Capital gains in India are of two types — Short Term Capital Gain (STCG) and Long Term Capital Gain (LTCG) — determined by how long you held the asset before selling. Budget 2024 revised tax rates effective July 23, 2024 without changing holding period criteria.
Short Term Capital Gain (STCG) — Key Facts
STCG arises when you sell a capital asset before the holding period threshold for LTCG classification. Key characteristics:
STCG on equity shares and equity mutual funds (with STT paid): taxed at 20% under Section 111A — no exemption, no indexation
STCG on property, gold, unlisted shares, debt funds: taxed at your income tax slab rate — added to total income
STCG losses can be set off against both STCG and LTCG income in the same year
Unabsorbed STCG losses can be carried forward for 8 assessment years
No annual exemption for STCG — every rupee of equity STCG is taxed at 20%
Long Term Capital Gain (LTCG) — Key Facts
LTCG arises when a capital asset is held beyond the threshold period. Favourable tax rates and exemptions apply:
LTCG on equity shares and equity MF (Section 112A): 12.5% on gains above ₹1.25 lakh per year — gains up to ₹1.25L are exempt
LTCG on property (Section 112): 12.5% without indexation (for property acquired after July 23, 2024); for earlier property, choose between 20% with indexation OR 12.5% without
LTCG on gold, unlisted shares, debt MF: 12.5% without indexation
LTCG losses can be set off only against LTCG income — cannot set off against STCG or ordinary income
Section 87A rebate is NOT available on LTCG under Section 112A — even if total income is below ₹12 lakh
STCG vs LTCG — Holding Period by Asset Class (FY 2025-26)
| Asset Class | LTCG if held > | STCG if held ≤ | LTCG Tax Rate | STCG Tax Rate |
|---|---|---|---|---|
| Listed equity shares / equity MF | 12 months | 12 months | 12.5% (₹1.25L exempt) | 20% |
| Immovable property | 24 months | 24 months | 12.5% (no indexation) | Slab rate |
| Unlisted shares | 24 months | 24 months | 12.5% | Slab rate |
| Debt mutual funds / bonds | 36 months | 36 months | 12.5% | Slab rate |
| Gold / jewellery / other assets | 24 months | 24 months | 12.5% | Slab rate |
| Cryptocurrency / VDA | No distinction | No distinction | 30% flat (Section 115BBH) | 30% flat (Section 115BBH) |
A capital asset is any property owned by an individual, whether or not it is connected to their business or profession.
Types of Capital Assets
1. Movable Property
Jewelry
Shares and securities
Vehicles
Art and antiques
2. Immovable Property
Land
Buildings
House property
Commercial property
Classification of Capital Assets
1. Financial Assets
Stocks and shares
Mutual fund units
Bonds and debentures
Digital assets and cryptocurrencies
2. Real Estate
Residential property
Commercial property
Agricultural land (within municipal limits)
Plot of land
3. Personal Assets
Jewelry and precious stones
Artifacts and paintings
Collectibles and antiques
Vehicles
Understanding how inherited assets are treated for capital gains tax purposes
Key Aspects of Inherited Assets
Cost of Acquisition
The cost to the previous owner is considered as your cost
The holding period includes the previous owner's period
Fair market value as of April 1, 2001 can be considered if inherited before this date
Taxation Rules
No tax at the time of inheritance
Capital gains apply only when you sell the inherited asset
Special provisions for agricultural land inheritance
Basic Formula
Capital Gains = Sale Price - (Cost of Acquisition + Improvement Cost + Transfer Expenses)
Components of Calculation
Sale Price: The amount received from selling the asset
Cost of Acquisition: Original purchase price
Improvement Cost: Any expenses incurred to improve the asset
Transfer Expenses: Expenses related to the transfer of the asset
Indexation Benefit — Budget 2024 Change
Indexation removed for assets acquired after July 23, 2024 — 12.5% flat rate without indexation
For property acquired before July 23, 2024: choose the lower of (a) 20% with indexation or (b) 12.5% without indexation
Equity shares and equity MFs never had indexation — not applicable
Cost Inflation Index (CII) still published annually by CBDT for eligible assets
The Cost Inflation Index (CII) is notified annually by CBDT under Section 48 of the Income Tax Act. It is used to compute the indexed cost of acquisition for eligible assets, reducing taxable capital gains. Indexation is available only for assets acquired before July 23, 2024 (for individuals and HUFs). Equity shares and equity MF never had indexation.
CII Table — Base Year FY 2001-02 = 100
| Financial Year | CII |
|---|---|
| 2001-02 | 100 |
| 2002-03 | 105 |
| 2003-04 | 109 |
| 2004-05 | 113 |
| 2005-06 | 117 |
| 2006-07 | 122 |
| 2007-08 | 129 |
| 2008-09 | 137 |
| 2009-10 | 148 |
| 2010-11 | 167 |
| 2011-12 | 184 |
| 2012-13 | 200 |
| 2013-14 | 220 |
| 2014-15 | 240 |
| 2015-16 | 254 |
| 2016-17 | 264 |
| 2017-18 | 272 |
| 2018-19 | 280 |
| 2019-20 | 289 |
| 2020-21 | 301 |
| 2021-22 | 317 |
| 2022-23 | 331 |
| 2023-24 | 348 |
| 2024-25 | 363 |
How to Use CII for Indexed Cost Calculation
Formula: Indexed Cost of Acquisition = Original Cost × (CII of Year of Sale ÷ CII of Year of Purchase)
Example: Property purchased in FY 2010-11 for ₹20 lakh. Sold in FY 2024-25. Indexed cost = ₹20L × (363 ÷ 167) = ₹43.47 lakh. LTCG = ₹90L sale − ₹43.47L = ₹46.53L × 20% = ₹9.31L tax (vs 12.5% without indexation on ₹70L gain = ₹8.75L — compare both options)
Indexation is available to individuals and HUFs on property and gold acquired before July 23, 2024
Companies must use 12.5% without indexation — no choice available
Source: CBDT notifications under Section 48, Income Tax Act 1961
Section 87A rebate is available under the new regime for individuals with total income up to ₹12 lakhs — but CBDT has clarified critical restrictions for equity investors.
Section 87A Rules for Capital Gains (FY 2025-26)
Rebate IS Available
Available to resident individuals with total income up to ₹12 lakh (new regime)
Applicable on ordinary income tax — salary, interest, rent, other sources
Maximum rebate: ₹60,000 under new regime (FY 2025-26)
⚠ Rebate NOT Available — Critical Exception
NOT available on STCG on equity/equity MF taxed under Section 111A (20%)
NOT available on LTCG under Section 112A (12.5%)
This applies even if your total income is below ₹12 lakh
CBDT clarified this restriction via circular — applicable from FY 2024-25 onwards
Only the ordinary income portion of tax is eligible for the 87A rebate
Deductible Expenses
1. Acquisition Related
Purchase cost of the asset
Registration charges
Stamp duty paid
2. Improvement Expenses
Renovation costs
Extension or modification expenses
Any capital expenditure on the asset
3. Transfer Expenses
Brokerage charges
Legal fees
Advertisement expenses
Commission paid
Practical Examples
1. Property Sale (acquired before July 23, 2024)
Purchase price: ₹50 lakhs (2015) · CII 2015-16: 254
Sale price: ₹90 lakhs (FY 2024-25) · CII 2024-25: 363
Indexed cost = 50L × (363/254) = ₹71.46 lakhs
LTCG with indexation = ₹90L − ₹71.46L = ₹18.54 lakhs @ 20%
OR LTCG without indexation = ₹90L − ₹50L = ₹40L @ 12.5%
Choose the option giving lower tax (20% × 18.54L = ₹3.71L vs 12.5% × 40L = ₹5L → indexation is better here)
2. Equity LTCG Example (held 14 months)
Purchase of listed shares: ₹5 lakhs
Sale: ₹7.5 lakhs (held 14 months — LTCG under Section 112A)
Gross LTCG: ₹2.5 lakhs
Exempt: ₹1.25 lakhs
Taxable LTCG: ₹1.25 lakhs @ 12.5% = ₹15,625 tax
3. Equity STCG Example (held 8 months)
Purchase of equity MF units: ₹3 lakhs
Sale: ₹3.8 lakhs (held 8 months — STCG under Section 111A)
STCG: ₹80,000 @ 20% = ₹16,000 tax
Note: Section 87A rebate NOT available on this STCG
Tax Rates Structure
| Type of Capital Gain | Tax Rate |
|---|---|
| STCG on equity/equity MF (Sec 111A) | 20% |
| LTCG on equity/equity MF (Sec 112A) | 12.5% (above ₹1.25 lakh exempt) |
| LTCG on property/other assets | 12.5% without indexation |
| STCG on other assets (property, debt MF) | As per income tax slab |
A surcharge applies on income tax when total income exceeds ₹50 lakh. For capital gains from equity shares and equity mutual funds under Sections 111A and 112A, surcharge is capped at 15% regardless of income level — this cap does not apply to property, gold, or unlisted share gains.
Surcharge Rate by Income Level — FY 2025-26
| Total Income | Surcharge | Effective LTCG (equity) incl. cess | Effective STCG (equity) incl. cess |
|---|---|---|---|
| Up to ₹50 lakh | Nil | 13.0% | 20.8% |
| ₹50 lakh – ₹1 crore | 10% | 14.3% | 22.9% |
| ₹1 crore – ₹2 crore | 15% | 14.95% | 23.9% |
| Above ₹2 crore (equity) | 15% (capped) | 14.95% | 23.9% |
Key Rules
15% surcharge cap on equity gains — Surcharge on LTCG under Section 112A and STCG under Section 111A is capped at 15% even for income above ₹2 crore or ₹5 crore (Finance Act 2022 amendment). High-income equity investors do not pay the 25% or 37% surcharge on equity capital gains.
No cap on other capital gains — Full surcharge (up to 25% for ₹2–5 crore, 37% for above ₹5 crore) applies on LTCG from immovable property, gold, and unlisted shares.
4% Health and Education Cess applies on (income tax + surcharge). It cannot be avoided and is not eligible for any deduction.
Marginal relief may apply if total income slightly exceeds the surcharge threshold, ensuring the excess tax does not exceed the excess income.
Available Exemptions
1. Section 54 Exemptions
Sale of residential house and investment in new house
Maximum exemption limit: ₹10 crore
Investment timeline requirements
Conditions for claiming exemption
2. Section 54EC
Investment in specified bonds
Maximum investment limit: ₹50 lakhs
Lock-in period of 5 years
Timeline for investment: 6 months
3. Other Exemptions
Section 54B: Agricultural land
Section 54F: Any long-term asset
Section 54GB: Investment in eligible startups
NRIs (Non-Resident Indians) who sell capital assets in India are liable for capital gains tax under the Income Tax Act. TDS is deducted at source by the buyer under Section 195. NRIs can claim exemptions under Sections 54, 54EC, and 54F, and may benefit from Double Taxation Avoidance Agreements (DTAA) with their country of residence.
TDS Rates on Capital Gains — NRI Sellers (FY 2025-26)
| Asset | TDS Rate | Section |
|---|---|---|
| Listed equity shares / equity MF — LTCG (held > 12 months) | 12.5% + surcharge + 4% cess | 112A + 195 |
| Listed equity shares / equity MF — STCG (held ≤ 12 months) | 20% + surcharge + 4% cess | 111A + 195 |
| Immovable property — LTCG (held > 24 months) | 12.5% + surcharge + 4% cess | 195 |
| Immovable property — STCG (held ≤ 24 months) | 30% (slab rate) + surcharge + 4% cess | 195 |
| Unlisted shares — LTCG (held > 24 months) | 12.5% + surcharge + 4% cess | 195 |
DTAA and Exemptions for NRIs
DTAA (Double Taxation Avoidance Agreement)
If the NRI is a tax resident of a country with a DTAA with India, a lower TDS rate may apply on capital gains
NRI must submit Form 10F and a Tax Residency Certificate (TRC) from their country of residence to claim DTAA benefit
Common DTAA countries: USA, UK, Singapore, Mauritius, Netherlands
UAE does not have a comprehensive capital gains tax treaty with India — full Indian rates apply for UAE residents
Apply for a Lower TDS Certificate (Form 13) from the Assessing Officer if actual tax liability is lower than applicable TDS
Exemptions Available to NRIs
Section 54 — NRIs can claim LTCG exemption by reinvesting in one residential house in India
Section 54EC — available to NRIs; invest in NHAI/REC bonds within 6 months of sale (max ₹50 lakh)
Section 54F — available to NRIs; invest in a residential house for LTCG on any long-term capital asset
If reinvestment is pending before the ITR due date, deposit the gains in a Capital Gains Account Scheme (CGAS) at any nationalised bank to preserve the exemption
NRI ITR Filing
NRIs must file ITR-2 to report capital gains from Indian assets
TDS deducted under Section 195 is credited against total tax liability — excess TDS is refunded
NRI buyers of property must obtain a TAN and deduct TDS at applicable rates before paying the seller
NRI capital gains taxation is complex — DTAA claims, TRC, Form 10F, and Section 195 compliance require CA guidance
Capital gains must be reported in your Income Tax Return (ITR). The correct form depends on your income sources. ITR-1 (Sahaj) cannot be used if you have any capital gains income — even a single mutual fund redemption disqualifies you from ITR-1.
Which ITR Form to Use for Capital Gains
ITR-2: For salaried individuals, pensioners, and those with income from other sources (interest, rent, dividends) who also have capital gains — equity, MF, property, gold. Most investors and property sellers file ITR-2.
ITR-3: If you have business or professional income in addition to capital gains. F&O traders and intraday traders must use ITR-3.
ITR-1 (Sahaj) — Not allowed: Cannot be used if you have ANY capital gains, even from a single mutual fund or share redemption. Must upgrade to ITR-2.
ITR-4 (Sugam) — Not allowed: Taxpayers under presumptive taxation (Section 44AD/44ADA) cannot report capital gains in ITR-4. Must use ITR-3.
Schedule CG in ITR-2 — What to Fill
LTCG Under Section 112A (Equity / Equity MF)
Report each scrip / MF separately: ISIN, name, purchase date, sale date, sale consideration, cost of acquisition
If shares were held before January 31, 2018: cost = higher of (actual purchase cost) or (Fair Market Value as on Jan 31, 2018) — this is the grandfathering rule
Net taxable LTCG = Total LTCG − ₹1.25 lakh exemption
Report LTCG from equity separately from LTCG on other assets
STCG Under Section 111A (Equity with STT)
Aggregate STCG amount is sufficient — scrip-wise detail is not required in Schedule CG
Full STCG taxed at 20%; Section 87A rebate not available on this portion
Obtain capital gains statement from your broker (Zerodha, Groww, Upstox, etc.)
LTCG / STCG on Property and Gold
Report sale consideration, cost of acquisition, indexed cost (if claiming indexation), improvement cost, and transfer expenses
If claiming Section 54 / 54EC / 54F exemption: fill Schedule 54, 54EC, or 54F with reinvestment details
Property sold: attach sale deed, purchase deed, and Section 54EC bond certificate if applicable
Documents Required for Capital Gains ITR
Equity / MF: Capital gains statement from broker P&L report (Zerodha Console, Groww, etc.) or AMC annual capital gains statement from CAMS / KFintech
Mutual funds (all AMCs): Consolidated capital gains statement from CAMS or KFintech — covers all MF transactions in one report
Property: Sale deed, original purchase deed, property registration documents, improvement expense receipts, Section 54 new property registration / 54EC bond certificate
Gold: Purchase invoice, sale invoice or valuation certificate; SGB redemption — RBI/bank redemption letter
Loss carry-forward: Prior year ITR acknowledgement showing carried-forward capital losses
ITR-2 Filing Due Dates — AY 2026-27
July 31, 2026: Due date for individuals not subject to audit. Covers most equity investors, MF holders, and property sellers.
October 31, 2026: If tax audit under the Income Tax Act is required (typically for businesses, not individual investors).
December 31, 2026: Last date for belated return — attracts late filing fee: ₹1,000 (income ≤ ₹5 lakh) or ₹5,000 (income > ₹5 lakh). Plus interest under Section 234A on unpaid tax.
Important: Capital losses can only be carried forward 8 years if the original return is filed on or before the due date. A belated return loses the right to carry forward capital losses.
This guide is based on the following primary sources. Tax law is subject to change with each Finance Act — verify current rates with the latest official notifications before making tax decisions.
Primary Legal Sources
Income Tax Act, 1961 — Sections 45, 47, 48, 54, 54B, 54EC, 54F, 54GB, 111A, 112, 112A, 115BBH
Finance Act, 2024 — Capital gains tax amendments effective July 23, 2024 (LTCG to 12.5%, STCG to 20%, indexation removal)
Finance Act, 2023 — Removal of LTCG treatment for debt mutual funds purchased on or after April 1, 2023
Finance Act, 2022 — Surcharge on LTCG/STCG from equity capped at 15%
CBDT Notification S.O. 1692(E) — Cost Inflation Index for FY 2024-25 (CII = 363)
CBDT Circular — Section 87A rebate not available on STCG under Section 111A and LTCG under Section 112A
Official Resources
Income Tax Department India — incometaxindia.gov.in
Central Board of Direct Taxes — cbdt.gov.in
e-Filing Portal — eportal.incometax.gov.in
What are the new capital gains tax rates after Budget 2024?
Budget 2024 revised capital gains rates effective FY 2024-25 onwards: STCG on equity/equity MF increased to 20% (from 15%), LTCG on equity/equity MF increased to 12.5% (from 10%) with the exemption limit raised to ₹1.25 lakh (from ₹1 lakh). LTCG on other assets like property, debt MF is now 12.5% without indexation. These rates continue for FY 2025-26.
What is the LTCG tax rate on property for FY 2025-26?
For property sold in FY 2025-26: 12.5% without indexation applies for property acquired after July 23, 2024. For property acquired before July 23, 2024, you may choose the more beneficial option — either 20% with indexation or 12.5% without indexation. File ITR-2 and select the option that gives a lower tax liability.
Is Section 87A rebate available on STCG from equity for FY 2025-26?
No. As clarified by CBDT, Section 87A rebate is not available on STCG taxed under Section 111A (equity, equity MF) and LTCG under Section 112A — even if your total income is below ₹12 lakh. The rebate is available on other ordinary income portions. This is a critical planning point for investors.
What is the LTCG exemption limit on equity for FY 2025-26?
Under Section 112A, LTCG from equity shares and equity mutual funds exceeding ₹1.25 lakh per financial year is taxed at 12.5% (no indexation). Gains up to ₹1.25 lakh remain exempt. This limit was raised from ₹1 lakh in Budget 2024.
Do I need to pay advance tax on capital gains?
Yes. Advance tax is payable on capital gains income. However, for capital gains arising from the sale of assets (other than speculative income), you can pay the entire advance tax by March 15 of the financial year without penalty, provided no advance tax was due in earlier installments on account of capital gains.
Are cryptocurrency gains taxable in FY 2025-26?
Yes. Cryptocurrency and other Virtual Digital Assets (VDAs) are taxed at a flat 30% + 4% cess on net gains under Section 115BBH — regardless of the holding period. No deduction is allowed except the cost of acquisition. Losses from VDAs cannot be set off against any other income. TDS at 1% applies on transfers above ₹10,000 (₹50,000 for specified persons).
How are ESOP capital gains taxed in FY 2025-26?
ESOPs are taxed at two stages: (1) On exercise: the difference between Fair Market Value and exercise price is taxed as perquisite income at slab rate. (2) On sale: if held 12+ months after exercise — LTCG at 12.5% above ₹1.25 lakh; if held less than 12 months — STCG at 20% (for listed shares with STT paid).
Can I save tax on LTCG from property by investing in another house?
Yes. Under Section 54, LTCG from sale of a residential property is exempt if the proceeds are reinvested in a new residential house within 2 years (purchase) or 3 years (construction). Maximum exemption: ₹10 crore. Other options: Section 54EC bonds (max ₹50 lakh, within 6 months), or Capital Gains Account Scheme (CGAS) to park funds temporarily.
Is LTCG on debt mutual funds with indexation still available?
No. From April 1, 2023 (Finance Act 2023), gains from debt mutual funds purchased after April 1, 2023 are taxed at slab rates (treated as short-term regardless of holding period). For debt MFs purchased before April 1, 2023 — the Budget 2024 revision applies 12.5% without indexation for LTCG.
How much capital gain is tax-free in India FY 2025-26?
For equity shares and equity mutual funds (Section 112A), LTCG up to ₹1.25 lakh per financial year is tax-free. Gains above ₹1.25L are taxed at 12.5%. For STCG on equity (Section 111A), there is no exemption — the full gain is taxed at 20%. For property and gold LTCG, there is no annual exemption — the full gain is taxed at 12.5%.
What is the long-term capital gain tax rate on shares in India?
LTCG on listed equity shares (and equity-oriented mutual funds) held for more than 12 months is taxed at 12.5% under Section 112A, after exempting the first ₹1.25 lakh of gains per year. This rate was increased from 10% in Budget 2024 (effective July 23, 2024). No indexation benefit is available on equity LTCG.
How is capital gains tax on gold calculated in India?
Capital gains on gold (physical gold, gold ETFs, Sovereign Gold Bonds): Holding period > 24 months → LTCG @ 12.5% (no indexation) on the full gain. Holding ≤ 24 months → STCG added to income and taxed at slab rate. For gold ETFs held > 12 months, they are treated as equity MF if ETF tracks equity — otherwise 24-month rule applies. Sovereign Gold Bond redemption at maturity is fully exempt under Section 47.
Is it better to pay LTCG tax at 12.5% or save tax under Section 54?
Section 54 applies only if you're selling a residential house and buying another house. For a gain of say ₹30 lakh on property, LTCG tax would be ₹30L × 12.5% = ₹3.75 lakh (plus cess). If you invest the proceeds in a new house, the full ₹30L gain is exempt under Section 54 — saving ₹3.75L in tax. Section 54EC bonds (max ₹50L, 5-year lock-in) is the alternative if you don't want to buy another house.
Can I set off capital gains losses against other income?
Loss set-off rules for capital gains:
• STCG loss can be set off against STCG or LTCG income in the same year.
• LTCG loss can only be set off against LTCG (not STCG).
• Capital loss cannot be set off against salary, interest, or business income.
• Unadjusted capital losses can be carried forward for 8 assessment years.
• Losses from VDAs (crypto) cannot be set off against any other income — including other crypto gains.
What ITR form should I use to report capital gains?
Use ITR-2 for capital gains from shares, mutual funds, property, gold, or any other capital asset — if you are a salaried individual or have income from other sources (not business/profession). Use ITR-3 if you have business income in addition to capital gains. ITR-1 (Sahaj) cannot be used if you have any capital gains. Report each asset's LTCG/STCG separately in Schedule CG of the ITR form.
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