Capital gains tax in India varies dramatically by asset type and holding period. The same ₹5 lakh profit can attract anywhere from 0% to 30% tax depending on whether it's from equity, debt mutual funds, real estate, or gold — and whether you held it short or long term. This calculator picks the right rule and computes the exact tax for your transaction.
What is Capital Gains?
When you sell an asset for more than you paid, the profit is a capital gain. The Income Tax Act splits these into Short-Term (STCG) and Long-Term (LTCG) based on how long you held the asset, with the cutoff varying by asset class — 12 months for listed equity, 24 months for property, 36 months for gold and unlisted shares.
Tax rates also vary. Listed equity STCG is 20%, LTCG is 12.5% above ₹1.25 lakh per year. Debt mutual funds bought after April 2023 are always taxed at slab rate regardless of holding period. Property LTCG is 12.5% without indexation (post Jul 2024) or 20% with indexation (transitional option for older holdings). Each combination of asset and period maps to a specific rule.
How capital gains tax is calculated
Step 1: classify the gain as STCG or LTCG by checking the holding period against the asset's cutoff. Step 2: apply the right rate. STCG on equity is 20%; STCG on most other assets is your slab rate. LTCG on equity is 12.5% above ₹1.25 lakh annual exemption; LTCG on property and gold is 12.5% (or 20% with indexation if eligible). Step 3: multiply the rate by the taxable gain.
Indexation, where available, adjusts the purchase cost for inflation using the Cost Inflation Index (CII), reducing the taxable gain. The 2024 budget removed indexation from LTCG on property and gold and dropped the rate to 12.5%, with a transitional option to use 20% with indexation for assets bought before July 23, 2024.
- Gain
- Sale − Purchase—with optional indexation adjustment for property/gold
- Rate
- Tax rate—depends on asset and STCG/LTCG classification
- Exemption
- Annual exemption—₹1.25 lakh for equity LTCG; nil for others
How to use this calculator
Pick the asset class
Listed equity / equity mutual fund, debt mutual fund, real estate, or gold/unlisted. Each has different holding-period cutoffs and tax rates.
Enter purchase price and sale price
Purchase = your cost basis (what you paid plus brokerage and other acquisition costs). Sale = what you received minus any selling costs. The difference is the gross gain or loss.
Enter holding period in months
From purchase date to sale date. The calculator uses this to classify STCG vs LTCG using each asset's specific cutoff (12 / 24 / 36 months).
For property/gold, choose indexation option
If asset bought before 23 Jul 2024, you can opt for 20% with indexation (reducing taxable gain by inflation) or 12.5% without. The calculator shows both options so you can pick the lower tax.
Read the tax payable
STCG/LTCG classification, applicable rate, gain after exemption, and final tax. Compare against your slab rate (for STCG on debt) to see if it's preferable to short-term.
When to use it
Booking equity mutual fund profits
Holding over 1 year is dramatically better — 12.5% vs 20%, and ₹1.25 lakh annual exemption. Many investors deliberately hold to 13-14 months to cross the LTCG cutoff before booking.
Selling a residential property
Capital gains on property sold over 24 months after purchase qualify for LTCG. Reinvesting under section 54 (in another residential property) or 54EC (in NHAI/REC bonds, ₹50 lakh cap) can fully or partially exempt the gain.
Gold investment exit
Physical gold and gold ETFs both follow the same rules — LTCG above 36 months at 12.5% post-July 2024. Sovereign Gold Bonds held to maturity are fully tax-exempt on capital gains, a unique advantage.
Common mistakes to avoid
Treating debt MF gains held over 3 years as LTCG
Debt mutual funds purchased on or after 1 April 2023 are always taxed at slab rate, regardless of holding period. The old LTCG-with-indexation regime applies only to debt MFs bought before that date.
Forgetting brokerage and STT in cost basis
Acquisition cost includes brokerage, STT, GST on brokerage, and stamp duty (for property). Sale proceeds are net of selling brokerage and STT. Including these reduces taxable gain.
Missing the equity LTCG exemption when filing
Schedule CG of ITR-2/3 has specific rows for ₹1.25L equity LTCG exemption. Many DIY filers report the gross LTCG and over-pay. Use the right schedule.
Frequently asked questions
What's the difference between LTCG and STCG?
Is the ₹1.25 lakh equity LTCG exemption per year or lifetime?
How are debt mutual funds taxed?
What happened to indexation on property and gold?
Can I save tax by reinvesting capital gains?
How are capital losses set off?
References
- Income Tax Act sections 45-55A — Capital gains— Income Tax Department
- Finance Act 2024 — Capital gains rate changes— Income Tax Department