How Capital Gains Tax Works in India: Equity, Property & Gold

Guides · Tax India · Updated 2026

Selling an asset for a profit triggers capital gains tax, but the rules differ wildly depending on whether you held shares, a flat, or physical gold. For FY 2025‑26, the long‑term capital gains (LTCG) rate on most assets is 12.5% (without indexation), and the exemption threshold for listed equity is ₹1.25 lakh. This guide breaks down the holding‑period definitions, tax rates, and a worked example across three asset classes — so you know exactly what you'll owe before you sell.

Why Holding Period Matters More Than You Think

Short‑term vs long‑term classification determines the tax rate. For listed equity and equity mutual funds, the holding period is just 12 months for LTCG. For unlisted shares and property, it's 24 months. For gold and debt mutual funds, it's 24 months. Short‑term gains are taxed at slab rates (or a special rate for equity: 20% on STCG). LTCG is generally taxed at 12.5% for most assets now, but the old 20% with indexation option remains for property and gold if it results in lower tax — a choice you can make per transaction.

Listed equity/equity MF: 12 months → LTCG at 12.5% (above ₹1.25L); STCG at 20%.
Property (immovable): 24 months → LTCG at 12.5% (no indexation) or 20% with indexation; STCG at slab rate.
Gold (physical/ETF): 24 months → LTCG same as property; STCG at slab rate.

Step-by-step: Calculate Your Capital Gains Tax

Open the Capital Gains Tax Calculator tool.
Select the asset type (equity, property, gold, etc.), enter purchase date, sale date, purchase cost, and sale value.
If applicable, enter the Cost Inflation Index (CII) for indexation. The tool computes both indexed and non‑indexed LTCG and lets you choose the lower tax liability.
The final output shows taxable gain, applicable tax rate, and the total tax (plus cess) you owe.

💡 Tip: For property, always calculate tax both ways — with indexation (20%) and without (12.5%). Older properties may still benefit from indexation due to high inflation adjustments.

Worked Example: Equity, Property, Gold

      Equity: Bought 1,000 shares at ₹200 each in Jan 2023, sold in Mar 2026 at ₹450 each. Gain = ₹2,50,000. LTCG (held >12 months). Exempt up to ₹1,25,000 → taxable gain = ₹1,25,000. Tax = 12.5% = ₹15,625 + 4% cess = ₹16,250.

      Property: Flat bought in 2005 for ₹20 lakh, sold in 2025 for ₹1 crore. LTCG without indexation = ₹80 lakh, tax at 12.5% = ₹10 lakh. With indexation (CII 2005-06: 117, 2025-26: 363), indexed cost = 20L × (363/117) ≈ ₹62.05 lakh, gain = ₹37.95 lakh, tax at 20% = ₹7.59 lakh. So indexation wins.

      Gold: Bought 100g gold in 2022 for ₹4,80,000, sold in 2025 for ₹7,50,000. LTCG without indexation = ₹2,70,000, tax at 12.5% = ₹33,750. With indexation (CII 2022-23: 331, 2025-26: 363), indexed cost ≈ ₹5,26,465, gain ≈ ₹2,23,535, tax at 20% = ₹44,707. This time 12.5% flat is better.

For general investment tracking, our CAGR Calculator helps you know the raw return before taxes.

Frequently Asked Questions

Is the ₹1.25 lakh LTCG exemption per scrip or overall?

It's an aggregate exemption of ₹1.25 lakh across all listed equity shares and equity‑oriented funds in a financial year. Not per stock.

Do I pay capital gains tax on inherited property?

No tax at inheritance. When you later sell, the holding period includes the previous owner's period, and the cost of acquisition is the original owner's cost (or FMV as on 1 April 2001, if older).

Can I set off short‑term capital loss against LTCG?

Yes, short‑term capital loss can offset both short‑term and long‑term gains. Long‑term capital loss can only offset long‑term gains.

What is the tax rate on unlisted shares?

LTCG on unlisted shares (held >24 months) is 12.5% without indexation. STCG is taxed at slab rates.

Is it free and private?

Yes — the tool runs entirely in your browser, free, with no sign‑up and nothing uploaded to a server.

Try the Capital Gains Tax Calculator