Capital Gains Tax in India: STCG, LTCG & Indexation
Capital gains tax in India depends on the asset type and how long you held it. For equity mutual funds and stocks, short-term capital gains (held under 12 months) are taxed at 15%, while long-term gains above ₹1 lakh are taxed at 10% without indexation. Debt funds and real estate have different rules — real estate LTCG qualifies for indexation benefit, which can significantly reduce your taxable gain.
Frequently asked questions
Quick answer
What is the LTCG tax on mutual funds in India?
Long-term capital gains on equity mutual funds held for more than 12 months are taxed at 10% on gains exceeding ₹1 lakh in a financial year. Gains up to ₹1 lakh are completely tax-free, making equity a tax-efficient investment for patient investors.
What is the LTCG tax on mutual funds in India?
Long-term capital gains on equity mutual funds held for more than 12 months are taxed at 10% on gains exceeding ₹1 lakh in a financial year. Gains up to ₹1 lakh are completely tax-free, making equity a tax-efficient investment for patient investors.
How is STCG tax calculated on stocks?
If you sell listed equity shares or equity mutual fund units within 12 months, your profit is classified as STCG and taxed at a flat 15% regardless of your income slab. For example, a ₹50,000 short-term profit means ₹7,500 in tax.
What is indexation benefit on real estate capital gains?
Indexation adjusts your property's purchase price for inflation using the Cost Inflation Index (CII) published by the Income Tax Department. This inflated cost basis reduces your taxable gain — for example, a property bought for ₹30L in 2012 and sold for ₹80L in 2024 may have a much lower taxable gain after indexation.
Are debt mutual funds still eligible for indexation after 2023?
No. From April 1, 2023, debt mutual funds (with less than 35% equity) lost the LTCG indexation benefit. Gains on debt funds are now added to your income and taxed at your applicable slab rate, regardless of the holding period.