If you've sold anything for a profit — shares, mutual funds, property, gold — you owe capital gains tax on it, and the rate depends entirely on what you sold and how long you held it.
The first question is always: short-term or long-term? For equity and equity mutual funds, that line is 12 months. For almost everything else — debt funds, property, gold — it's 24 months. Cross that line and you qualify for the (usually lower) long-term rate; stay under it and you pay the short-term rate.
For equity, short-term gains are taxed at a flat 20%, and long-term gains at 12.5%, with the first ₹1.25 lakh of long-term equity gains in a year exempt entirely. For everything else, short-term gains are taxed at your regular income slab rate, and long-term gains at 12.5% without the indexation benefit that used to apply before the 2024 rule changes.
The Capital Gains Tax calculator on this site handles this classification and calculation automatically — the main thing worth internalising here is simply that timing your sale, even by a few weeks, can sometimes shift you from one tax bracket to a meaningfully cheaper one.
Frequently asked questions
What is capital gains tax?
Capital gains tax is the tax levied on the profit you make when you sell a capital asset — such as equity shares, mutual funds, property, or gold — for more than its purchase price, with the rate depending on the asset type and how long you held it.
What is the difference between short-term and long-term capital gains?
The classification depends on the holding period and asset type: equity and equity mutual funds held under 12 months are short-term, while other assets like debt funds, property, and gold are short-term if held under 24 months; longer holdings qualify as long-term.
What is the current LTCG tax rate on equity?
Long-term capital gains on equity shares and equity mutual funds held over 12 months are taxed at 12.5%, with the first ₹1.25 lakh of such gains in a financial year exempt from tax.