Capital Gains Tax
Calculator India 2025

Capital Gains Tax is levied on profits (gains) arising from the sale or transfer of a capital asset. A capital asset includes property, shares, mutual funds, gold, bonds, etc. It applies when you sell these assets at a price higher than your cost of acquisition. As per Income Tax Act 2025, capital gains are classified as Short Term (STCG) or Long Term (LTCG) based on the holding period, which varies by asset type.

Key Budget 2024 changes effective FY 2024-25: (1) LTCG on equity/equity MF increased from 10% to 12.5%, with exemption limit raised from ₹1 lakh to ₹1.25 lakh per year. (2) STCG on equity/equity MF increased from 15% to 20%. (3) LTCG on property/gold reduced from 20% to 12.5% but indexation benefit removed for assets purchased on/after July 23, 2024. (4) Holding period for most non-financial assets for LTCG reduced from 36 months to 24 months.

The ₹1,25,000 (₹1.25 lakh) exemption applies to the total LTCG on equity shares and equity-oriented mutual funds in a financial year. This is calculated on the net LTCG after deducting losses. Only gains above ₹1.25 lakh are taxed at 12.5%. This exemption is per individual per financial year and cannot be carried forward. For example, if your LTCG is ₹2,00,000, only ₹75,000 (₹2,00,000 − ₹1,25,000) will be taxed at 12.5%, resulting in a tax of ₹9,375.

It depends on when the property was purchased: (1) Purchased BEFORE July 23, 2024: You can choose either 12.5% without indexation OR 20% with indexation — whichever results in lower tax. (2) Purchased ON OR AFTER July 23, 2024: Only 12.5% without indexation is available; no indexation benefit. For properties where the purchase predates July 23, 2024, taxpayers should compare both options and pick the better one.

Yes, subject to specific rules: (1) Short-term capital loss can be set off against both STCG and LTCG. (2) Long-term capital loss can only be set off against LTCG. (3) Losses from VDA/Crypto CANNOT be set off against any other income. (4) Unabsorbed capital losses can be carried forward for up to 8 assessment years, but only if the ITR is filed on time. (5) Losses from exempted assets (like agricultural land in some cases) cannot be set off.

The grandfathering provision under Section 112A protects pre-existing gains. For listed equity shares/units held before January 31, 2018, the cost of acquisition is deemed to be the higher of: (a) the actual cost of acquisition, or (b) the lower of the Fair Market Value (FMV) on January 31, 2018 OR the actual sale price. This means gains accrued up to January 31, 2018 are effectively exempt from LTCG tax.

Step 1: Determine if it's STCG (held <24 months) or LTCG (held ≥24 months). Step 2 for LTCG: Calculate Indexed Cost = Purchase Price × (CII of Sale Year ÷ CII of Purchase Year) — applicable only if purchased before July 23, 2024 and you opt for 20% with indexation. Step 3: Net Capital Gain = Sale Price − Indexed/Actual Cost − Improvement Costs − Transfer Expenses. Step 4: Apply exemptions (Section 54, 54EC, 54F) if eligible. Step 5: Tax = Net Taxable Gain × Applicable Rate (slab for STCG; 12.5% or 20% for LTCG).

SGBs have special tax treatment: (1) If held to maturity (8 years), capital gains on redemption are completely EXEMPT under Section 10(38). (2) If transferred/sold on exchange before maturity after holding ≥12 months: 12.5% LTCG (no indexation). (3) If sold within 12 months: STCG taxed as per slab. The interest received on SGBs (2.5% p.a.) is, however, fully taxable as income from other sources.