You bought shares for ₹1 Lakh and sold them for ₹2 Lakhs. You made ₹1 Lakh profit. Is that full ₹1 Lakh yours? Not entirely.
1. What is Capital Gains Tax?
In India, almost every profit earned from investments is taxable. The government classifies this profit as "Capital Gains." The amount of tax you pay isn't fixed—it depends on what you sold (asset class) and how long you owned it (holding period).
2. Short Term vs Long Term (The Clock Matters)
The tax rate changes drastically based on time. This defines whether your profit is a Short Term Capital Gain (STCG) or Long Term Capital Gain (LTCG).
| Asset Class | Short Term (STCG) | Long Term (LTCG) |
|---|---|---|
| Equity (Shares / Equity MFs) | Less than 12 Months | More than 12 Months |
| Real Estate (Property) | Less than 24 Months | More than 24 Months |
| Debt Funds / Gold | Less than 24 Months | More than 24 Months |
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Don't do mental math. Enter your buy/sell details to know your exact tax liability.
Open Capital Gains Calculator3. New Tax Rates 2024-25 (The Cheat Sheet)
The Union Budget 2024 simplified (and increased) some rates. Here is the master table for the current financial year.
To compute exact tax instead of estimates, use our Capital Gains Calculator.
| Asset Type | STCG Rate | LTCG Rate |
|---|---|---|
| Equity Shares & Equity MFs | 20% (Increased from 15%) | 12.5% (Above ₹1.25L Exemption) |
| Debt Mutual Funds | Slab Rate | Slab Rate (Taxed as Income) |
| Real Estate / Gold | Slab Rate | 12.5% (No Indexation) |
| Listed Bonds | Slab Rate | 12.5% |
Note: Debt mutual fund taxation (Slab Rate) applies to investments made on or after 1 April 2023. Older investments may follow different rules with indexation benefits.
4. Equity & Mutual Funds Taxation
This is where most retail investors feel the pinch. If you invest in the stock market or equity mutual funds (SIPs), note these two major changes:
- STCG is now 20%: If you sell within 1 year, you pay a flat 20% on profit.
- LTCG Exemption Increased: Your long-term profit is tax-free up to ₹1.25 Lakhs per year (previously ₹1 Lakh). Profit above this is taxed at 12.5%.
Tip: Use Tax Harvesting to book profits up to ₹1.25 Lakhs annually to save tax.
5. Real Estate & Gold Taxation
Real Estate (Crucial Update):
The new LTCG rate is a flat 12.5% without indexation. However, to protect existing homeowners, the government introduced a "Grandfathering Clause."
For properties bought after July 23, 2024, the only rate applicable is 12.5% (no indexation).
Gold: Gold ETFs, Digital Gold, and physical gold are taxed at 12.5% LTCG if held for more than 24 months, as per current rules, without indexation benefit. Short term gains are added to your income.
6. Does Your Tax Regime Affect Capital Gains Tax?
This is a common misconception among investors.
Whether you choose the Old Regime (with deductions) or the New Regime (lower slabs), capital gains from shares, mutual funds, gold, or property are taxed independently.
- Equity & Mutual Funds → Capital Gains tax rates applied separately.
- Fixed Deposits → Interest added to income (Taxed at Slab).
- Gold & Property → Separate capital gains rules.
To understand how salary taxation works separately, read: New vs Old Tax Regime Explained .
Conclusion
Taxes are an inevitable cost of investment. While you cannot avoid them, you can plan for them. By understanding the difference between STCG and LTCG—and the new options in Real Estate—you can time your exits to minimize liability and maximize wealth.