Capital Gains Tax — Equity
Calculate STCG (20%) and LTCG (12.5% above Rs 1.25L) on equity mutual funds and stocks. Includes grandfathering for pre-Jan 2018 gains and surcharge calculation.
Capital Gains Tax — Equity (STCG/LTCG)
STCG 20% · LTCG 12.5% above Rs 1.25L (Budget 2024)
Total cost of acquisition (purchase price × units)
Total sale proceeds (sale price × units)
Rates per Budget 2024: LTCG 12.5% above Rs 1.25L; STCG 20%. STT must be paid on sale for these rates to apply.
Post-Budget 2024, LTCG on equity is 12.5% above Rs 1.25L (was 10% above Rs 1L). STCG is now 20% (was 15%). The LTCG exemption increase to Rs 1.25L helps small investors — if your annual equity gains are below Rs 1.25L, you pay zero LTCG tax regardless of amount.
Equity Capital Gains Tax in India — STCG and LTCG explained
When you sell equity mutual fund units or listed shares, the profit is called a capital gain. The tax rate depends on how long you held the investment. Gains from units held for more than 12 months are Long-Term Capital Gains (LTCG). Gains from units sold within 12 months are Short-Term Capital Gains (STCG).
LTCG tax on equity — Budget 2024 rules
Post-Budget 2024, LTCG on equity mutual funds and listed shares is taxed at 12.5% on gains exceeding Rs 1,25,000 per financial year. Gains up to Rs 1.25 lakh are fully exempt. Previously the rate was 10% with a Rs 1 lakh exemption. The increase in the exemption limit benefits small retail investors — those with annual equity gains under Rs 1.25L pay zero LTCG tax.
STCG tax on equity — Budget 2024 rules
Short-term capital gains on equity shares and equity mutual funds sold within 12 months are taxed at a flat rate of 20% (previously 15%). This is a flat rate applied regardless of your income tax slab — whether you're in the 5% or 30% slab, STCG on equity is 20%. Securities Transaction Tax (STT) must have been paid on the sale for these concessional rates to apply.
Tax harvesting — the Rs 1.25L strategy
Since LTCG up to Rs 1.25L per year is tax-free, savvy investors use "tax harvesting" — selling equity mutual fund units each March to book gains up to Rs 1.25L and immediately repurchasing. This resets the cost basis without paying any tax, effectively reducing the future LTCG tax liability. This strategy works best for long-term equity investors with significant unrealised gains.