Capital Gains Tax Calculator

The distinction is based on how long you held the asset before selling it. For listed equity shares and equity-oriented mutual funds, gains on assets held for more than 12 months are long-term; 12 months or less are short-term. For real estate and unlisted shares, the threshold is 24 months. For gold, debt mutual funds, and other assets, it's 36 months. Short-term gains are generally taxed at higher rates (20% for equity STCG under Section 111A, or your income tax slab rate for non-equity STCG), while long-term gains benefit from lower rates (12.5% for most LTCG post-FY 2024-25). The holding period is calculated from the date of purchase to the date of sale, and different rules apply for bonus shares, rights issues, and inherited property.

When you sell a residential or commercial property held for more than 24 months, the gain is long-term and taxed at 12.5% (without indexation from FY 2024-25). The gain is calculated as: Sale Consideration minus (Indexed Cost of Acquisition + Cost of Improvement + Transfer Expenses). Previously, indexation using the Cost Inflation Index (CII) significantly reduced taxable gains by inflating the purchase cost to current values. From FY 2024-25, indexation benefit is removed for most assets, replaced by a flat 12.5% rate. You can claim exemption under Section 54 by reinvesting the capital gains in up to two residential properties (subject to conditions), or under Section 54EC by investing up to Rs 50 lakh in REC or NHAI bonds within 6 months of sale.

Yes, several exemptions are available. Under Section 112A, LTCG on listed equity shares and equity mutual funds up to Rs 1.25 lakh per financial year is completely tax-free. Gains above this threshold are taxed at 12.5%. For property sales, Section 54 exempts LTCG if you reinvest the gain in one or two residential houses in India (with conditions on purchase timing and amount). Section 54EC allows exemption up to Rs 50 lakh by investing in specified bonds within 6 months. Section 54F provides full exemption on sale of non-property assets if the entire sale consideration (not just the gain) is reinvested in a residential property. Additionally, the basic exemption limit (Rs 2.5 lakh under old regime, Rs 3 lakh under new regime) applies — if your total income including LTCG is below this limit, no tax is payable.

Mutual fund taxation depends on the fund type. Equity-oriented funds (with 65%+ equity allocation): STCG (held ≤12 months) taxed at 20%, LTCG (held >12 months) taxed at 12.5% above Rs 1.25 lakh/year. Debt-oriented funds: from FY 2024-25, all gains are taxed at your income tax slab rate regardless of holding period (the previous distinction between short-term and long-term with indexation has been removed for most debt funds). Hybrid funds are classified based on their equity allocation percentage. This change makes equity funds more attractive for long-term investors from a tax perspective, while debt funds have become less tax-efficient for higher-slab taxpayers.

Yes, the Income Tax Act allows set-off and carry-forward of capital losses. Short-term capital losses (STCL) can be set off against both short-term and long-term capital gains. Long-term capital losses (LTCL) can only be set off against long-term capital gains. Any unabsorbed loss can be carried forward for 8 subsequent assessment years. However, to carry forward losses, you must file your income tax return before the due date. Losses from one asset class generally cannot be set off against gains from a different class (e.g., property loss against equity gain), though the specific rules vary. Proper loss set-off planning can significantly reduce your overall tax liability across multiple years.

Maintain detailed records of all purchase and sale transactions: contract notes from your broker showing date, quantity, price, and brokerage; property registration documents with stamp duty and registration charges; improvement costs with receipts (for property); corporate action records (bonus shares, splits, mergers) that affect your cost basis; and proof of any exemptions claimed (bond certificates for Section 54EC, new property purchase documents for Section 54). For equity held in demat, your demat statement and broker contract notes serve as primary records. Keep these documents for at least 6 years from the end of the relevant assessment year, as the tax department may seek verification during assessments or scrutiny.