Capital gains tax rates on equity
| Sold | STCG (≤ 12 months) | LTCG (> 12 months) | LTCG exemption |
|---|---|---|---|
| On or after 23 Jul 2024 | 20% | 12.5% | ₹1.25 lakh / year |
| Before 23 Jul 2024 | 15% | 10% | ₹1 lakh / year |
These rates apply to listed shares and equity-oriented mutual funds where STT was paid. The ₹1.25 lakh exemption applies to the whole of FY 2024-25 onwards. 4% health and education cess is added to the tax.
Worked example
You bought 1,000 shares at ₹500 in June 2023 and sold them at ₹800 more than a year later. The gain is ₹3,00,000 and long-term. After the ₹1,25,000 exemption, ₹1,75,000 is taxed at 12.5% = ₹21,875, plus 4% cess = ₹22,750. Had you sold within 12 months, the whole ₹3,00,000 would be taxed at 20% plus cess = ₹62,400.
Grandfathering for shares bought before 2018
For equity bought before 1 February 2018, your cost for LTCG is the higher of the actual purchase price and the price on 31 January 2018, capped at the sale price. Gains made before that date stay tax-free. Enter the 31 January 2018 price when your buy date is earlier than 1 February 2018.
Frequently asked questions
What are the current capital gains tax rates on shares?
For listed shares and equity mutual funds sold on or after 23 July 2024: short-term gains (held 12 months or less) are taxed at 20%, and long-term gains at 12.5% above a ₹1.25 lakh yearly exemption. Budget 2026 left these rates unchanged. 4% cess is added on top.
What is grandfathering?
Long-term gains on equity bought before 1 February 2018 are only taxed on the growth after 31 January 2018. Your cost is taken as the higher of what you paid and the fair market value on 31 January 2018 (capped at the sale price).
How are debt mutual funds taxed?
Debt fund units bought on or after 1 April 2023 are taxed at your income tax slab rate no matter how long you hold them. There is no long-term benefit or indexation.
Is the ₹1.25 lakh exemption per trade?
No, it is per person per financial year across all your equity LTCG. If you already booked long-term gains this year, enter the amount of exemption already used.
Does this include surcharge?
No. Surcharge applies only above ₹50 lakh total income and is capped at 15% for capital gains on equity. This calculator also does not apply loss set-off or the Section 87A rebate.
Results are estimates for educational purposes only and are not investment, tax or financial advice. Verify figures with your broker or advisor before acting on them.