Capital Gains Tax in India: The Complete Guide (Budget 2024 Rules)
Capital gains tax is one of the most common — and most confusing — taxes Indian investors face. Whether you've sold stocks, redeemed mutual fund units, sold property, or traded cryptocurrency, the tax treatment depends on the type of asset, the holding period, and when you purchased it. Budget 2024 significantly changed the rates, making this calculator essential for anyone selling assets in FY 2025-26.
Capital gains tax rates at a glance
| Asset type | STCG rate | LTCG rate | Holding for LTCG |
|---|---|---|---|
| Listed equity / equity MF | 20% | 12.5% (₹1.25L exempt) | > 12 months |
| Debt MF (post-Apr 2023) | Slab rate (no LTCG benefit) | N/A | |
| Debt MF (pre-Apr 2023) | Slab rate | 20% with indexation | > 36 months |
| Property | Slab rate | 12.5% or 20% indexed* | > 24 months |
| Crypto / VDA | 30% flat (no distinction) | N/A | |
* For property purchased before 23 July 2024, you can choose between 12.5% without indexation or 20% with indexation — whichever results in lower tax. Our calculator automatically compares both options and highlights the better one.
How LTCG on equity works after Budget 2024
The most common capital gains scenario for Indian investors is selling listed equity shares or equity mutual funds. After Budget 2024 (effective 23 July 2024), the rules are:
- Short-term (≤ 12 months): taxed at 20% under Section 111A (up from 15%)
- Long-term (> 12 months): taxed at 12.5% under Section 112A (up from 10%), with the first ₹1.25 lakh of LTCG exempt per financial year (up from ₹1 lakh)
The ₹1.25 lakh exemption is annual and shared across all equity LTCG in a financial year — not per transaction. If you sell multiple stocks or redeem multiple equity funds, the exemption is applied to the combined LTCG. This is why our calculator supports multiple assets and computes the exemption correctly.
Grandfathering for equity bought before 31 January 2018
When LTCG tax on equity was introduced in Budget 2018, a grandfathering provision was included to protect gains accrued before the tax was applicable. For shares/MF units bought before 1 February 2018, the cost of acquisition is taken as the higher of:
- The actual purchase price, or
- The Fair Market Value (FMV) on 31 January 2018 (capped at the sale price)
This ensures that appreciation before January 2018 is not taxed. You can find FMV data from NSE/BSE historical records or your broker's contract notes.
Property capital gains: the indexation decision
Selling property is often the largest capital gains event in a person's financial life. For property held longer than 24 months (long-term), the tax treatment depends on when you purchased it:
- Purchased before 23 July 2024: You can choose between 12.5% tax on actual gains (no indexation) or 20% tax on indexed gains (using Cost Inflation Index). The right choice depends on how much inflation adjustment helps — usually, older properties benefit more from indexation.
- Purchased on or after 23 July 2024: Only the 12.5% flat rate without indexation is available.
Our calculator automatically computes both options for eligible properties and shows you which one saves more tax — a feature most calculators don't offer.
The indexation choice is property-specific and can be made independently for each property sale. Always compare both options — the "obvious" choice isn't always cheaper.
Cryptocurrency and VDA taxation
Virtual Digital Assets (VDAs) — including Bitcoin, Ethereum, NFTs, and all other tokens — are taxed at a flat 30% under Section 115BBH, regardless of how long you held them. There is no short-term vs long-term distinction, no exemption, and crucially, losses from VDA transactions cannot be set off against any other income. A 1% TDS also applies on transfers exceeding ₹10,000 in a financial year.
Loss offset and carry-forward rules
Understanding how losses work is critical for tax planning:
- Short-term capital loss (STCL) can be offset against both STCG and LTCG from any asset class
- Long-term capital loss (LTCL) can only be offset against LTCG — not STCG
- VDA losses can only be offset against VDA gains — not gains from other assets
- Unabsorbed losses can be carried forward for 8 assessment years, but only if you file your ITR on time
Health and education cess
A 4% health and education cess is levied on the total capital gains tax (including surcharge, if applicable). This calculator includes the cess in the total tax computation. Surcharge applies if your total income (including capital gains) exceeds ₹50 lakh — consult your CA for the exact rate.
Common mistakes to avoid
- Forgetting that the ₹1.25L equity LTCG exemption is annual and shared — selling ₹5L of LTCG across 10 stocks still gets only ₹1.25L exempt
- Not using grandfathering for pre-2018 equity — you may be overpaying tax on old holdings
- Assuming indexation always helps for property — sometimes the 12.5% flat rate is cheaper
- Setting off VDA losses against equity gains — this is not allowed
- Missing the ITR filing deadline — you lose the ability to carry forward capital losses
- Not including transfer expenses (brokerage, stamp duty) which reduce the taxable gain