Short term or long term
A capital gain is the profit when you sell an investment: sale value minus what it cost, minus the expenses of buying and selling. How it's taxed depends on what you sold and how long you held it.
| Asset | Long term after | Short-term tax | Long-term tax |
|---|---|---|---|
| Listed shares, equity mutual funds | 12 months | 20% | 12.5% above ₹1.25 lakh a year |
| Gold ETFs; SGBs sold or bought on the exchange | 12 months | Slab rate | 12.5% |
| Property, physical gold, gold funds, unlisted shares | 24 months | Slab rate | 12.5% |
| Debt funds bought before 1 Apr 2023 | 24 months | Slab rate | 12.5% |
| Debt funds bought from 1 Apr 2023 | Never | Slab rate | — |
Long term means held for more than the period: shares bought on 10 January 2025 are long term if sold on or after 11 January 2026. A 4% health and education cess is added to the tax. These are the rates for sales from 23 July 2024, which the Income-tax Act, 2025 kept for tax year 2026-27.
The ₹1.25 lakh exemption on shares and equity funds
The first ₹1.25 lakh of long-term gains on listed shares and equity mutual funds each year is tax-free, across all your sales. Example: shares bought for ₹5 lakh and sold for ₹8 lakh more than a year later make a ₹3 lakh gain; ₹1.75 lakh is taxed at 12.5%, which is ₹21,875 + ₹875 cess. Booking some gains each year to use the exemption is a common way to save tax.
Shares bought before 1 February 2018
Gains made up to 31 January 2018 aren't taxed. The cost is taken as the higher of what you paid and the lower of the 31 January 2018 value and the sale price. Enter the 31 January 2018 value (closing price or NAV × units) and the calculator applies this.
Property: with or without indexation
For property bought before 23 July 2024, resident individuals and HUFs can pay the lower of 12.5% on the gain, or 20% on the gain after raising the cost for inflation with the Cost Inflation Index (384 for 2026-27). The calculator works out both and shows the lower. Buying another home (sections 54 and 54F) or 54EC bonds can reduce the tax further.
Sovereign Gold Bonds
From 1 April 2026, gains on redemption are tax-free only for an individual who bought the bond from RBI at issue and held it until maturity. A bond bought on the stock exchange, or sold before maturity, is taxed like a gold ETF.
This is a guide to the rules, not tax advice; surcharge for very high incomes isn't included. Work out the tax on the rest of your income with the income tax calculator, and the real return on an investment with the XIRR calculator.
Results are estimates for illustration only, not financial advice. Banks and schemes may round, apply TDS or use slightly different day counts — confirm figures with your bank or employer. Written by the Welthr team; last reviewed on .