Complete guide to LTCG tax FY 2025-26: Section 112A rates, property Budget 2024 choice rule (20% CII vs 12.5%), grandfathering calculation, ₹1.25L exemption, exemptions under 54/54EC/54F, CGAS, loss set-off, and ITR-2 Schedule CG filing.
LTCG Quick Reference — All Asset Classes
Section 112A — Equity LTCG, ₹1.25L Exemption & Grandfathering
LTCG on Property — Budget 2024 Choice Rule & CII Table
LTCG on Gold, SGB & Other Assets
LTCG Exemptions — Sections 54, 54B, 54EC, 54F & 54GB
Capital Gains Account Scheme (CGAS)
LTCG Calculation Examples
Loss Set-Off & Carry Forward Rules
How to Report LTCG in ITR-2 (Schedule CG)
FAQs on Long-term Capital Gains
LTCG Rates by Asset Class — FY 2025-26
Budget 2024 (effective July 23, 2024) overhauled LTCG rules: equity rate raised from 10% to 12.5%, indexation removed for most assets, and property gets a choice rule for old purchases. LTCG rates are identical under both old and new tax regimes.
| Asset Class | Holding Period for LT | LTCG Rate | Indexation | ₹1.25L Exemption | Section |
|---|---|---|---|---|---|
| Listed equity shares (STT paid) | >12 months | 12.5% | No | Yes | 112A |
| Equity-oriented MF (≥65% in equity) | >12 months | 12.5% | No | Yes | 112A |
| Immovable property — bought before Jul 23, 2024 | >24 months | 20% with CII OR 12.5% without (choose lower tax) | Optional | No | 112 |
| Immovable property — bought on/after Jul 23, 2024 | >24 months | 12.5% | No | No | 112 |
| Physical gold / jewellery | >24 months | 12.5% | No | No | 112 |
| Gold ETF (listed on exchange) | >12 months | 12.5% | No | No | 112A |
| Gold MF / fund of funds | >24 months | 12.5% | No | No | 112 |
| Debt mutual funds (purchased after Apr 1, 2023) | N/A | Slab rate (always) | No | No | Special |
| Unlisted shares (domestic company) | >24 months | 12.5% | No | No | 112 |
| Sovereign Gold Bond — at RBI maturity (8 years) | — | EXEMPT | — | — | 10(47) |
| SGB — sold on secondary market before maturity | >12 months | 12.5% | No | No | 112A |
| Crypto / VDA (Virtual Digital Assets) | N/A | 30% flat (always) | No | No | 115BBH |
What Budget 2024 Changed for LTCG
Finance Act 2024, effective July 23, 2024, made these key changes:
| What Changed | Before Jul 23, 2024 | From Jul 23, 2024 |
|---|---|---|
| Equity LTCG rate | 10% above ₹1 lakh | 12.5% above ₹1.25 lakh |
| Equity LTCG annual exemption | ₹1,00,000 | ₹1,25,000 |
| Property LTCG — new purchases | 20% with CII indexation | 12.5% without indexation only |
| Property LTCG — old purchases sold now | 20% with CII indexation | Choice: 20%+CII or 12.5% without — use whichever gives lower tax |
| Gold / jewellery LTCG | 20% with CII indexation | 12.5% without indexation |
| Unlisted shares LTCG | 20% with indexation | 12.5% without indexation |
What Qualifies Under Section 112A?
Section 112A covers listed equity shares, equity-oriented mutual funds (≥65% corpus in equity), and listed business trust units held for more than 12 months.
Assets covered under Section 112A
Listed equity shares on recognised stock exchange — STT paid on both buy and sell
Units of equity-oriented mutual funds (≥65% of corpus in equity) — STT paid on redemption
Units of business trusts (REITs, InvITs) listed on recognised exchange
Sovereign Gold Bonds sold via secondary market — if held >12 months
Assets NOT under 112A (taxed under Section 112 at 12.5%)
Off-market transfer of listed shares (no STT paid on transaction)
Preference shares — only ordinary equity shares qualify
Unlisted equity shares of domestic or foreign company
Bonds, debentures, debt mutual fund units
Gold ETFs and gold MF units (subject to separate 12.5% rate)
Key Tax Rules for Section 112A LTCG
Tax rate: 12.5% (plus 4% health & education cess = effective 13% total)
Annual exemption: first ₹1,25,000 of aggregate 112A LTCG per FY is tax-free
No indexation — cost of acquisition is actual purchase price (or grandfathered Jan 31, 2018 FMV)
No Chapter VI-A deductions (80C, 80D, etc.) can be set off against 112A LTCG
No Section 87A rebate — 112A LTCG is taxed even when total income is below ₹7L or ₹12L
Basic exemption offset: if your other income is below ₹3L/₹4L (basic exemption), the shortfall can be applied to reduce LTCG before applying the 12.5% rate
Grandfathering — January 31, 2018 FMV Rule
When LTCG on equity was re-introduced via Finance Act 2018, a grandfathering clause protected gains earned before January 31, 2018. This is still relevant for shares and equity MF units purchased before that date.
Cost of acquisition = HIGHER of (a) actual purchase price, OR lower of (b) FMV on Jan 31, 2018 and (c) actual sale price
Effect: all gains accrued up to January 31, 2018 become tax-free; only appreciation after that date is taxed
FMV on Jan 31, 2018 for listed shares = highest traded price on NSE/BSE on that date
FMV for equity mutual funds = NAV published by the fund house on January 31, 2018
For shares acquired after January 31, 2018: no grandfathering — actual purchase price is always the cost
Grandfathering Calculation — Worked Example
Example: 1,000 shares of ABC Ltd. purchased in March 2014 at ₹100/share. Market price on January 31, 2018 was ₹280/share. Sold in September 2025 at ₹450/share. No other LTCG in the year.
| Step | Without Grandfathering | With Grandfathering (actual rule) |
|---|---|---|
| Actual purchase price | ₹100/share | ₹100/share |
| FMV on Jan 31, 2018 | Not considered | ₹280/share |
| Cost of acquisition used | ₹100/share | ₹280/share (higher of ₹100 vs min(₹280, ₹450)) |
| Sale price (Sep 2025) | ₹450/share | ₹450/share |
| Gross LTCG per share | ₹350 | ₹170 |
| Total LTCG (1,000 shares) | ₹3,50,000 | ₹1,70,000 |
| Less: ₹1.25L exemption (Sec 112A) | ₹1,25,000 | ₹1,25,000 |
| Taxable LTCG | ₹2,25,000 | ₹45,000 |
| Tax @ 12.5% | ₹28,125 | ₹5,625 |
| Add: 4% cess | ₹1,125 | ₹225 |
| Total tax payable | ₹29,250 | ₹5,850 |
| Tax saving from grandfathering | — | ₹23,400 |
The Budget 2024 Choice Rule for Property Purchased Before July 23, 2024
If you purchased immovable property (house, land, commercial building) BEFORE July 23, 2024 and sell it in FY 2025-26, you can choose the option that gives you lower tax:
Option A: 20% with CII indexation (pre-Budget 2024 rule)
Indexed cost = Purchase price × (CII of sale year ÷ CII of purchase year)
Reduces taxable LTCG by accounting for inflation over the holding period
Typically better for property purchased 8–10+ years ago when CII difference is large
Option B: 12.5% without indexation (new rule)
LTCG = Net sale consideration − Original purchase price − Transfer expenses
Simpler calculation; lower rate but applied on a larger (unadjusted) gain
May be better for recently purchased property (2018–2023) where inflation adjustment is small
Cost Inflation Index (CII) Table — FY 2001-02 to FY 2025-26
CII base year is 2001-02 = 100. For property acquired before April 1, 2001, use FMV on April 1, 2001 as the cost of acquisition for indexation. Formula: Indexed Cost = Purchase Price × (CII of Sale Year ÷ CII of Purchase Year).
| 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 |
| 2025-26 | 376 |
Option A vs Option B — Property Sold in FY 2025-26
Example: House purchased in FY 2015-16 for ₹40 lakh. Sold in FY 2025-26 for ₹90 lakh. Transfer expenses (brokerage + registration): ₹1 lakh. CII: 254 (FY 2015-16) → 376 (FY 2025-26).
| Step | Option A: 20% + CII | Option B: 12.5% only |
|---|---|---|
| Purchase cost | ₹40,00,000 | ₹40,00,000 |
| Indexed cost (₹40L × 376/254) | ₹59,21,260 | Not applicable |
| Sale consideration | ₹90,00,000 | ₹90,00,000 |
| Less: transfer expenses | ₹1,00,000 | ₹1,00,000 |
| Net sale consideration | ₹89,00,000 | ₹89,00,000 |
| Taxable LTCG | ₹29,78,740 | ₹49,00,000 |
| Tax rate | 20% | 12.5% |
| LTCG tax before cess | ₹5,95,748 | ₹6,12,500 |
| 4% cess | ₹23,830 | ₹24,500 |
| Total tax payable | ₹6,19,578 | ₹6,37,000 |
| Better option? | ✅ Saves ₹17,422 | ❌ Higher |
LTCG on Gold — All Forms
Budget 2024 unified gold LTCG treatment: indexation removed, rate set at 12.5% for most gold instruments. Holding period thresholds vary by instrument.
| Gold Type | Long-term Holding | LTCG Rate | Notes |
|---|---|---|---|
| Physical gold / jewellery | >24 months | 12.5% | Making charges and hallmarking included in cost. Inherited gold: use original owner's purchase date and cost |
| Gold ETF (listed on NSE/BSE) | >12 months | 12.5% | Treated as listed security; no STT requirement |
| Gold MF / gold fund of funds | >24 months | 12.5% | Not equity-oriented; 24-month threshold applies |
| Sovereign Gold Bond — at RBI maturity | — | EXEMPT u/s 10(47) | Interest is taxable at slab rate; only capital gain at maturity is exempt |
| SGB — sold on stock exchange (secondary market) | >12 months | 12.5% | Taxed like listed security; no grandfathering |
| SGB — premature redemption via RBI (after 5 years) | >12 months | 12.5% | RBI allows premature redemption at coupon dates from the 5th year onwards |
Unlisted Shares — LTCG Rules
Unlisted equity shares (not listed on any recognised exchange, including startup shares, ESOP shares of unlisted companies) are taxed under Section 112:
Holding period: >24 months for long-term classification
LTCG rate: 12.5% without indexation (Budget 2024 removed the 20%+indexation option)
No ₹1.25L exemption — that applies only to Section 112A (listed shares/equity MF)
NRIs selling unlisted shares: 10% LTCG under Section 115E (different rate from residents)
Fair market valuation rules apply for unlisted shares: FMV determined per Rule 11UA
Debt Mutual Funds — Post-April 2023 Rule
Finance Act 2023 fundamentally changed debt MF taxation:
Debt MF purchased on/after April 1, 2023: taxed at slab rate regardless of holding period — no LTCG/STCG distinction exists
This applies to all non-equity oriented MF where domestic equity exposure is less than 35%
Affects: debt funds, liquid funds, money market funds, credit risk funds, international funds (equity abroad), and most fund-of-funds
Exception: Gold ETFs and silver ETFs were carved out and continue to be taxed at 12.5% after the prescribed holding period
Debt MF purchased before April 1, 2023: Finance Act 2023 removed the old 20%+indexation benefit — now taxed at slab rate on sale after April 1, 2023
LTCG Exemption Sections — Comparison
You can save LTCG tax by reinvesting gains in specified assets. The exemption is reversed if the new asset is sold within the lock-in period.
| Section | Asset Sold | Reinvest In | Investment Cap | Time Limit | Lock-in |
|---|---|---|---|---|---|
| 54 | Residential property | 1 or 2 residential properties (India) | ₹10 crore on exemption | Purchase: 1 year before or 2 years after sale; Construction: 3 years after sale | 3 years |
| 54B | Agricultural land (urban or rural) | Agricultural land (India) | Amount of LTCG | Within 2 years of transfer | 3 years |
| 54EC | Any long-term capital asset | NHAI or REC bonds (specified bonds) | ₹50 lakh per financial year | Within 6 months of sale | 5 years |
| 54F | Any LTCG asset EXCEPT residential property | 1 residential property (India) | Full sale consideration (partial = proportional exemption) | Purchase: 1 year before or 2 years after sale; Construction: 3 years after sale | 3 years |
| 54GB | Residential property / plot | Equity shares of eligible new startup | Net sale consideration; startup invests in new assets within 1 year | Shares subscribed within 1 year; startup invests within 1 year of subscription | 5 years |
Section 54 — Key Conditions (Most Common)
Section 54 exempts LTCG when you sell one residential house and buy/construct another:
Available only to individuals and HUFs — not companies, firms, or LLPs
Property sold must be a residential house property — not commercial property, plots, or agricultural land
Can claim exemption for 2 properties if LTCG does not exceed ₹2 crore — this option can be exercised only once in a lifetime
₹10 crore cap: exemption cannot exceed ₹10 crore regardless of actual reinvestment amount
If new property is sold within 3 years of purchase: the exemption previously claimed is reversed and taxed as LTCG in the year of sale
New property must not be sold within 3 years — and you cannot take a housing loan against it either (that triggers reversal)
Section 54EC — Key Conditions (Bonds)
Section 54EC exempts LTCG on any capital asset (property, gold, unlisted shares) by investing in government-backed bonds:
Only NHAI and REC bonds currently qualify — check current availability before investing
Maximum ₹50 lakh per financial year — straddle the FY boundary to double up: invest ₹50L before March 31 and ₹50L from April 1 onwards
Investment must be within 6 months of the date of transfer (not the date of registration)
5-year lock-in: cannot sell, pledge, convert, or transfer these bonds for 5 years from date of investment
Interest income from 54EC bonds is taxable at slab rate — these are NOT tax-free bonds
Premature closure or transfer of bonds reverses the entire exemption — full LTCG becomes taxable in that year
Section 54F — Key Conditions (Any Asset → Residential House)
Section 54F is used when you sell shares, gold, commercial property, or any non-residential asset and buy a house:
Not available if you already own more than 1 residential house (excluding the new property being purchased)
Entire net sale consideration must be reinvested for full exemption — if only part is invested, exemption = (amount invested ÷ net sale consideration) × LTCG
Example: LTCG = ₹50L, sale consideration = ₹80L; if ₹60L invested → exemption = (60/80) × ₹50L = ₹37.5L
New residential property must not be sold within 3 years — doing so reverses the exemption
Cannot claim 54F and Section 54 simultaneously for the same transaction
What is CGAS and When Do You Need It?
If you cannot complete your reinvestment (property purchase, bond investment) before the ITR filing deadline, you must park the unutilised gain in a Capital Gains Account Scheme (CGAS) to preserve your exemption claim.
CGAS accounts are opened at designated public sector banks — SBI, PNB, Canara Bank, Bank of Baroda, and others
Deposit must be made BEFORE the ITR filing deadline (typically July 31) — not just before selling
You claim the Section 54/54B/54F exemption in ITR based on the CGAS deposit amount
Withdrawals from CGAS can only be made for the specific reinvestment purpose (property purchase, agricultural land, etc.)
Withdrawn amounts not used for the approved purpose are treated as LTCG in the year of withdrawal
If CGAS funds are not utilised within the specified reinvestment period: taxed as LTCG in the year the period expires
CGAS Account Types — Type A vs Type B
| Feature | Type A (Savings) | Type B (Term Deposit) |
|---|---|---|
| Nature of account | Savings account — like a regular bank savings account | Fixed deposit / term deposit |
| Interest rate | Savings rate (typically 3–4%) | FD rate (typically 6–7%) |
| Withdrawal flexibility | Can withdraw any time for approved purpose (using Form C) | Locked until maturity; premature allowed with bank penalty (use Form E/F) |
| Best suited for | Reinvestment expected within 1–2 years; need quick access to funds | Reinvestment 2–3 years away; want higher interest on parked funds |
| Tax on interest | Taxable at slab rate (₹10,000 exempt under 80TTA for individuals) | Taxable at slab rate; TDS deducted by bank |
CGAS Utilisation Deadlines by Section
| Exemption Section | Maximum Utilisation Period | If Not Utilised |
|---|---|---|
| Section 54 (sell residential → buy residential) | 2 years from date of transfer (purchase) or 3 years (construction) | Entire deposited amount taxed as LTCG in the year the period expires |
| Section 54B (sell agricultural land → buy agricultural land) | 2 years from date of transfer | Amount taxed as LTCG in expiry year |
| Section 54F (sell any asset → buy residential property) | 2 years (purchase) or 3 years (construction) from date of transfer | Proportional LTCG taxed in expiry year |
Example 1: Equity Shares with Grandfathering (Section 112A)
Suresh bought 2,000 shares of XYZ Ltd. in January 2015 at ₹120/share. FMV on January 31, 2018 was ₹310/share. He sold all shares in November 2025 at ₹500/share. No other LTCG in the year.
| Step | Amount |
|---|---|
| Actual purchase price | ₹120/share |
| FMV on Jan 31, 2018 | ₹310/share |
| Cost of acquisition (higher of ₹120 vs lower of ₹310, ₹500) | ₹310/share (grandfathered) |
| Sale price (Nov 2025) | ₹500/share |
| Gross LTCG per share | ₹500 − ₹310 = ₹190 |
| Total gross LTCG (2,000 shares) | ₹3,80,000 |
| Less: Section 112A exemption | ₹1,25,000 |
| Taxable LTCG | ₹2,55,000 |
| Tax @ 12.5% | ₹31,875 |
| Add: 4% health & education cess | ₹1,275 |
| Total LTCG tax payable | ₹33,150 |
Example 2: Property LTCG — Choosing the Better Option
Priya purchased a house in FY 2010-11 at ₹35 lakh (before July 23, 2024 — so she gets the Budget 2024 choice). Sold in FY 2025-26 for ₹1.20 crore with ₹2 lakh in brokerage and registration charges. CII: FY 2010-11 = 167; FY 2025-26 = 376.
| Step | Option A: 20% + CII | Option B: 12.5% only |
|---|---|---|
| Purchase cost | ₹35,00,000 | ₹35,00,000 |
| Indexed cost (₹35L × 376/167) | ₹78,80,240 | N/A |
| Sale consideration | ₹1,20,00,000 | ₹1,20,00,000 |
| Less: transfer expenses | ₹2,00,000 | ₹2,00,000 |
| Net sale consideration | ₹1,18,00,000 | ₹1,18,00,000 |
| Taxable LTCG | ₹39,19,760 (₹118L − ₹78.80L) | ₹83,00,000 (₹118L − ₹35L) |
| Tax before cess | ₹7,83,952 (20%) | ₹10,37,500 (12.5%) |
| 4% cess | ₹31,358 | ₹41,500 |
| Total tax payable | ₹8,15,310 | ₹10,79,000 |
| Better option? | ✅ Saves ₹2,63,690 | ❌ Higher |
Example 3: Equity MF SIP — ₹1.25L Exemption Covering Entire Gain
Anita invested ₹10,000/month via SIP in an equity fund from January to December 2023 (12 instalments). She redeemed all units in February 2025. Average purchase NAV ₹50; NAV at redemption ₹100. Total units: 200 (at ₹10,000/₹50 NAV).
FIFO rule: units purchased earliest are redeemed first
All 12 SIP instalments (Jan–Dec 2023) are redeemed in Feb 2025: each held >12 months = LTCG
Total cost: 12 × ₹10,000 = ₹1,20,000
Total redemption: 200 units × ₹100 NAV = ₹2,00,000
Total LTCG: ₹2,00,000 − ₹1,20,000 = ₹80,000
Less: Section 112A exemption = ₹1,25,000
Taxable LTCG: ₹0 (entire ₹80,000 is within the exemption limit)
Tax payable: ₹0
Note: if Anita had additional LTCG from shares of ₹60,000, aggregate 112A LTCG = ₹1,40,000; only ₹15,000 would be taxable at 12.5% = ₹1,875 tax
LTCL Set-Off Rules — What Can Be Set Off Against What
| Loss Type | Can Set Off Against | Cannot Set Off Against | Carry Forward |
|---|---|---|---|
| Long-term capital loss (LTCL) — any asset | LTCG only (any asset class) | STCG, salary, house property, business income | Up to 8 assessment years |
| Short-term capital loss (STCL) — any asset | STCG and LTCG both (more flexible) | Salary, house property, business income | Up to 8 assessment years |
| LTCL from equity (112A) | Any LTCG — including property, gold, unlisted shares | STCG, other income heads | Up to 8 assessment years |
Key Rules for Capital Loss Carry Forward
LTCL can ONLY be set off against LTCG — it cannot reduce STCG or any other income
Short-term capital loss (STCL) is more flexible — it can be set off against both STCG and LTCG
LTCL must be reported in your ITR even in years when you have no taxable income — this preserves the carry forward right
ITR must be filed by the due date (July 31) to carry forward capital losses — belated ITR forfeits the carry forward entirely
Losses from previous years are claimed in Schedule CYLA (Current Year Loss Adjustment) in ITR-2
Loss carry forward is tracked in Schedule CFL (Carry Forward of Losses); verify it matches previous ITR acknowledgements
VDA (crypto) losses cannot be set off against any other capital gains — crypto losses can only be offset within VDA gains
Tax Harvesting — Using the ₹1.25L Exemption Annually
The ₹1.25L annual exemption on equity LTCG is a 'use it or lose it' benefit. Tax harvesting locks in the higher cost basis every year:
Each March, book equity LTCG up to ₹1.25L — pay zero tax on this gain
Immediately repurchase the same shares or MF units — the new purchase price (now higher) becomes your cost basis
Next year, you need a larger appreciation before LTCG kicks in, reducing future taxable gains
Annual saving: ₹1.25L × 12.5% = ₹15,625 per year (plus ₹625 cess) = ₹16,250 annually
Over 10 years of compounding, this adds up to significant savings on a growing portfolio
Best executed in March (FY end) so the repurchased units start a fresh 12-month LTCG holding clock from April
Which ITR Form for Capital Gains?
| ITR Form | LTCG Allowed? | When to Use |
|---|---|---|
| ITR-1 (Sahaj) | ❌ No | Salaried + one house property only; cannot report any capital gains |
| ITR-2 | ✅ Yes — all LTCG and STCG | Salaried or pensioner with capital gains; no business income |
| ITR-3 | ✅ Yes — all LTCG, STCG, derivatives | Business or professional income + capital gains; F&O traders |
| ITR-4 (Sugam) | ⚠️ Only equity LTCG ≤ ₹1.25L | Presumptive business income; cannot report property/gold LTCG |
Step-by-Step: Reporting LTCG in ITR-2 Schedule CG
Step 1: Login at incometax.gov.in → e-File → File Income Tax Return → ITR-2 for AY 2026-27
Step 2: In Schedule CG, navigate to 'B — Long-Term Capital Gains'
Step 3: For equity LTCG (Section 112A): enter security-wise details — ISIN/scrip name, date of acquisition, date of sale, purchase price per unit, FMV on Jan 31, 2018 (for pre-2018 shares), full value of consideration, STT paid (yes/no)
Step 4: For property LTCG (Section 112): enter property description and address, date of transfer, cost of acquisition, cost of improvement, indexed cost (if choosing Option A), full sale consideration, transfer expenses, exemption details (54/54EC/54F)
Step 5: Claim exemptions — enter details of reinvestment or CGAS deposit under the relevant section (54, 54EC, 54F); for CGAS: enter bank name, branch, CGAS account number, and amount deposited
Step 6: Carry-forward losses from previous years — claim in Schedule CYLA; verify in Schedule CFL that prior year carry-forwards match
Step 7: In Schedule SI, confirm that 112A LTCG is at 12.5% and that no 87A rebate has been applied against it
Documents Needed for LTCG Filing
Equity LTCG: Capital gains statement from broker (Zerodha, Groww, HDFC Sec, etc.) with security-wise FIFO calculation, including FMV on Jan 31, 2018 for grandfathered shares
Mutual fund LTCG: Statement from CAMS or KFintech (consolidated statement) with cost of acquisition and redemption proceeds per folio
Property LTCG: Sale deed, purchase deed, stamp duty receipts, improvement expense receipts, brokerage invoices, Form 26QB TDS certificate if buyer deducted TDS
Gold LTCG: Original purchase receipts, jewellery valuation report, invoice for making charges
Section 54EC bonds: Bond certificate issued by NHAI/REC, bank payment proof, and DMAT statement if held in demat
CGAS deposit: Bank passbook or FD receipt for CGAS account with account number and branch details
Advance Tax on LTCG
If total tax liability (including LTCG tax) exceeds ₹10,000 in a year, advance tax is required. For capital gains that arise unexpectedly:
If LTCG arises after March 15 (e.g., you sell shares in March): pay the entire tax by March 31 to avoid interest
If LTCG arises earlier in the year: include the estimated LTCG tax in December 15 instalment (75%) and March 15 instalment (100%)
Equity LTCG special provision: if it was not estimable in advance (e.g., sudden market gains), pay full tax by March 15 without penalty for earlier instalments
Property sale: on receiving advance/part payment, estimate LTCG and pay advance tax — delayed payment attracts 1% interest per month under Section 234B/C
What is the LTCG exemption limit for equity shares in FY 2025-26?
The LTCG exemption limit for equity shares and equity-oriented mutual funds under Section 112A is ₹1,25,000 per financial year. This was raised from ₹1 lakh to ₹1.25 lakh by Budget 2024 (effective July 23, 2024). The first ₹1.25L of aggregate Section 112A LTCG in a year is completely tax-free; gains above this are taxed at 12.5% plus 4% cess.
What is the LTCG tax rate on property sold in FY 2025-26?
It depends on when the property was purchased. If purchased BEFORE July 23, 2024: you choose between 20% with CII indexation OR 12.5% without indexation — whichever gives you lower total tax. If purchased ON or AFTER July 23, 2024: only 12.5% without indexation applies. Property must be held for more than 24 months to qualify as long-term.
Can I claim Section 87A rebate on LTCG from equity shares?
No. Section 87A rebate (which gives relief of up to ₹60,000 for income up to ₹12 lakh under the new regime) is NOT available against LTCG under Section 112A. Even if your total income is low, the LTCG portion is taxed separately at 12.5% with no rebate. Only your salary, rent, and other income (not LTCG) can benefit from the 87A rebate.
What is grandfathering in LTCG and how does it reduce tax?
Grandfathering applies to listed equity shares and equity MF units purchased before February 1, 2018. Under this rule, the cost of acquisition is deemed to be the higher of (a) actual purchase price or (b) the FMV (market price) on January 31, 2018 — capped at the actual sale price. This makes all gains earned up to January 31, 2018 completely tax-free. Only gains after that date are taxed at 12.5%.
Is CII indexation still available for property sold in FY 2025-26?
Yes, but only for property purchased BEFORE July 23, 2024. Such properties can choose: 20% tax with CII indexation (if it gives lower tax) or 12.5% without indexation. For property purchased on or after July 23, 2024, indexation is not available — only 12.5% without indexation applies. Always calculate both options before filing ITR.
What is the maximum investment in Section 54EC bonds to save LTCG?
You can invest a maximum of ₹50 lakh per financial year in NHAI or REC bonds under Section 54EC. The investment must be made within 6 months of the sale. The bonds have a 5-year lock-in period. If you sell property in February, you can invest ₹50L before March 31 (current FY) and another ₹50L from April 1 (next FY) — saving tax on up to ₹1 crore in LTCG.
Can long-term capital loss be set off against short-term capital gains?
No. Long-term capital loss (LTCL) can only be set off against long-term capital gains (LTCG). It cannot be set off against short-term capital gains, salary, house property, or business income. However, short-term capital loss can be set off against both STCG and LTCG. Unabsorbed LTCL can be carried forward for up to 8 assessment years, but only if the ITR is filed by the due date.
Is LTCG on Sovereign Gold Bonds taxable?
It depends on how the SGB is redeemed. At maturity (after 8 years), capital gains are fully exempt under Section 10(47). If sold via the secondary market (stock exchange) before maturity, LTCG is taxed at 12.5% if held for more than 12 months. If redeemed prematurely via RBI (allowed from the 5th year at coupon dates), gains are taxable at 12.5% if the 12-month holding is met. SGB interest (2.5% per year) is always taxable at slab rate.
Do I need to report LTCG in ITR if the gain is below ₹1.25 lakh?
Yes. Even if total equity LTCG is below ₹1.25 lakh and no tax is payable, you must report it in Schedule CG of ITR-2. Failure to report can result in scrutiny notices. If you also have equity LTCG losses, reporting is especially important — you can only carry forward losses if they are disclosed in ITR filed by the due date.
Does the choice of old vs new tax regime affect LTCG rates?
No. LTCG tax rates are exactly the same under both the old and new tax regimes. Choosing between old and new regime only affects how your salary, house rent, and deductions are taxed — not capital gains. Section 112A (equity) is always 12.5%; property LTCG (Section 112) is always 12.5% or 20%+CII depending on purchase date, regardless of which regime you choose.