Capital Gains
Tax & DeductionsCapital gain is profit from selling a capital asset above its purchase price. Taxed as STCG or LTCG based on holding period, with rates varying by asset type.
In detail
Post Budget 2024 rates: Equity/equity MF -- 12 months holding, 12.5% LTCG (Rs 1.25L/year exempt). Debt funds -- slab rate. Real estate -- 24 months, 12.5% (no indexation). Gold/SGB -- 24 months, 12.5%. SGB at maturity (8 years) -- completely exempt.
Formula
LTCG tax (equity) = (Gains - Rs 1.25L exemption) x 12.5%
Real-life example
🇮🇳 India example
Sneha sells flat (bought Rs 40L, sold Rs 90L). LTCG = Rs 50L. Tax = Rs 6.25L at 12.5%. Previously with indexation, tax was similar in this example but indexation helped more in high-inflation years.
Frequently asked questions
How to save LTCG on property sale? ▼
Section 54: reinvest gains in new residential property within 2 years. Or invest in 54EC bonds (NHAI, REC) within 6 months, up to Rs 50L.