LTCG Tax Calculator
Tax on your long-term capital gains — 12.5% on equity above the ₹1.25 lakh exemption (sec 112A), 12.5% flat on other assets (sec 112).
What is Long-Term Capital Gains (LTCG) Tax?
Long-Term Capital Gains (LTCG) tax is a statutory direct tax levied on the net profits realized from the transfer or sale of capital assets—such as listed equity shares, equity mutual funds, residential real estate, gold, and unlisted securities—held for a minimum statutory holding period. If an asset is sold before satisfying the holding threshold, the profit is categorized and taxed as Short-Term Capital Gains (STCG).
The landmark Finance (No. 2) Act, 2024 (Budget 2024) introduced comprehensive rationalization across capital gains tax structures: standardizing holding periods, revising equity LTCG rates from 10% to 12.5%, enhancing the annual equity exemption limit to ₹1,25,000, and adjusting real estate indexation rules.
Statutory Holding Periods by Asset Class (Budget 2024)
Under the rationalized framework, holding periods that establish whether a gain is long-term are simplified into two uniform categories:
- 12 Months Threshold (Listed Securities): Listed equity shares on recognized Indian stock exchanges, equity-oriented mutual funds, and business trust units (REITs/InvITs) qualify as long-term if held for more than 12 months (365 days).
- 24 Months Threshold (All Other Assets): Unlisted shares, immovable residential and commercial real estate, land, and physical gold/jewellery qualify as long-term if held for more than 24 months (2 years).
- Specified Debt Mutual Funds: Mutual funds with less than 35% equity exposure bought on or after April 1, 2023 are deemed short-term under Section 50AA regardless of holding tenure and taxed at your marginal slab rate.
Equity LTCG Formulation (Section 112A)
Taxable Equity LTCG = Net Sale Consideration − Cost of Acquisition − Transfer Expenses − ₹1,25,000 Exemption
- Net Sale Consideration: Total proceeds realized upon selling equity units
- Cost of Acquisition: Purchase price paid (or fair market value as of Jan 31, 2018 under Grandfathering)
- Annual Exemption: ₹1,25,000 aggregate exemption per financial year across all Section 112A equity gains
- Tax Rate: Flat 12.5% on gains exceeding ₹1,25,000 + mandatory 4% Health & Education Cess
- Indexation: Explicitly disallowed for listed equity shares and equity mutual funds
Worked example: ₹5,00,000 Listed Equity Capital Gain
Consider an investor who sells listed equity shares in FY 2025-26 held for 3 years, realizing a net long-term capital gain of ₹5,00,000:
- Gross Long-Term Capital Gains: ₹5,00,000
- Section 112A Annual Statutory Exemption: ₹1,25,000 (exempt from tax)
- Taxable Long-Term Capital Gains: ₹5,00,000 − ₹1,25,000 = ₹3,75,000
- Basic LTCG Tax at 12.5%: ₹3,75,000 × 12.5% = ₹46,875
- Add 4% Health & Education Cess: ₹46,875 × 0.04 = ₹1,875
- Total LTCG Tax Payable: ₹46,875 + ₹1,875 = ₹48,750 (Effective tax rate of 9.75% on total profit)
LTCG Tax Rates Across Asset Classes (Post-Budget 2024)
| Asset Class | Qualifying Holding Period | Tax Rate | Indexation Benefit | Annual Exemption Limit |
|---|---|---|---|---|
| Listed Equity Shares & Equity MFs | > 12 Months | 12.5% | No Indexation | ₹1,25,000 per financial year |
| Unlisted Shares & Pre-IPO Stock | > 24 Months | 12.5% | No Indexation | Nil |
| Real Estate (Acquired after 23-Jul-2024) | > 24 Months | 12.5% | No Indexation | Nil (Exempt under Sec 54/54EC) |
| Real Estate (Acquired before 23-Jul-2024) | > 24 Months | 12.5% without indexation OR 20% with indexation | Optional for Residents | Nil (Exempt under Sec 54/54EC) |
| Gold & Sovereign Gold Bonds (Secondary) | > 24 Months | 12.5% | No Indexation | Nil |
| Specified Debt Mutual Funds | Any Period (Sec 50AA) | Slab Rate | No Indexation | Nil |
Grandfathering Mechanism for Pre-2018 Equity Holdings
When LTCG tax was reintroduced on listed equity shares in 2018, the law protected gains accrued up to January 31, 2018 through grandfathering provisions under Section 55(2)(ac). The deemed cost of acquisition is the higher of: (1) Actual purchase price, or (2) Lower of the highest traded price on January 31, 2018 and the actual sale price.
This statutory mechanism ensures that any capital gains that accumulated prior to February 1, 2018 remain 100% tax-free in the hands of long-term investors.
Capital Gains Tax Exemption Options (Section 54, 54EC, 54F)
Taxpayers realizing large capital gains on immovable real estate or other assets can legally eliminate or reduce LTCG tax by utilizing statutory rollover provisions:
- Section 54: Reinvest capital gains from a residential house into purchasing or constructing another residential house in India within statutory time limits (up to ₹10 crore).
- Section 54EC: Invest capital gains from real estate into notified Capital Gain Bonds (NHAI, REC, PFC, IRFC) up to ₹50,00,000 within 6 months of sale, locked for 5 years.
- Section 54F: Reinvest the net sale consideration from any non-residential asset (land, gold, unlisted shares) into a residential house, subject to owning not more than one house.
Frequently Asked Questions on LTCG Tax
Key insights into Budget 2024 amendments, equity exemptions, grandfathering rules, and property tax.
Effective July 23, 2024, the LTCG tax rate on listed equity shares and equity mutual funds was revised from 10% to 12.5% under Section 112A. Simultaneously, the annual tax-free exemption limit was increased from ₹1,00,000 to ₹1,25,000 per financial year.
The ₹1,25,000 exemption applies to the aggregate net long-term capital gains realized across all listed equity shares and equity mutual funds during that financial year. If your total equity LTCG is ₹1,10,000, you pay zero tax. If your total LTCG is ₹2,00,000, tax at 12.5% applies only on the excess ₹75,000.
No. Long-term capital losses (LTCL) can only be set off against long-term capital gains; they cannot be set off against short-term capital gains, salary, business, or interest income. Unadjusted LTCL can be carried forward for up to 8 consecutive financial years, provided the ITR was filed on time.
Under Section 55(2)(ac), if you bought listed shares or equity mutual funds before February 1, 2018, the market value on January 31, 2018 is adopted as your deemed cost of acquisition (if higher than your purchase price). This ensures all gains up to January 31, 2018 remain completely tax-free.
For properties bought on or after July 23, 2024, LTCG is taxed at 12.5% without indexation. For properties acquired before July 23, 2024 by resident individuals or HUFs, the law allows you to compute tax both ways: at 12.5% without indexation or at 20% with indexation, and pay whichever amount is lower.
You can invest up to ₹50,00,000 of capital gains arising from the sale of land or building into notified 5-year bonds issued by NHAI, REC, PFC, or IRFC within 6 months of the sale date. The invested amount is completely exempt from LTCG tax.
Yes, for resident individuals and HUFs. If your other taxable income (salary, business, interest) is below the basic exemption threshold (e.g., ₹2.5 lakh or ₹3 lakh), the unexhausted basic exemption balance can be used to reduce taxable long-term capital gains.
No. The income tax utility and legal provisions explicitly restrict the Section 87A rebate from offsetting tax on Long-Term Capital Gains under Section 112A. Even if your total taxable income is below ₹5 lakh or ₹12 lakh, tax at 12.5% on equity LTCG exceeding ₹1.25 lakh must be paid.
Physical gold, digital gold, and gold ETFs held for more than 24 months are taxed as LTCG at 12.5% without indexation. Sovereign Gold Bonds (SGBs) held until sovereign maturity (8 years) by individuals are 100% tax-free under Section 47(viiic).
Under Section 111A, Short-Term Capital Gains realized from the sale of listed equity shares and equity mutual funds held for 12 months or less are taxed at a flat rate of 20% plus 4% cess (increased from 15% in Budget 2024).