Current Rates at a Glance
| Asset | Long-term after | Short-term tax | Long-term tax |
|---|---|---|---|
| Listed shares, equity mutual funds | 12 months | 20% | 12.5% on gains above ₹1.25 lakh a year |
| Property (land, building) | 24 months | Slab rate | 12.5% without indexation, or 20% with indexation if bought before 23 Jul 2024 (residents) — lower of the two |
| Gold, unlisted shares, debt funds bought before 1 Apr 2023 | 24 months | Slab rate | 12.5% without indexation |
| Debt funds bought on/after 1 Apr 2023 | — | Slab rate | Slab rate (always) |
Add 4% cess to all of these. The Cost Inflation Index (CII) is 376 for FY 2025-26 and 384 for FY 2026-27.
Example 1: Equity Mutual Fund
You invested ₹1,00,000 in January 2023 and sold for ₹4,00,000 in June 2025. The gain of ₹3,00,000 is long-term. The first ₹1,25,000 is exempt; tax is 12.5% of ₹1,75,000 = ₹21,875, plus cess = ₹22,750.
Example 2: Flat Bought in 2010
Bought for ₹30 lakh in FY 2010-11 (CII 167), sold for ₹90 lakh in FY 2026-27 (CII 384). As a resident who bought before 23 July 2024 you pay the lower of:
- Without indexation: 12.5% of ₹60 lakh = ₹7,50,000 (₹7,80,000 with cess)
- With indexation: indexed cost ₹30 lakh × 384 ÷ 167 = ₹68,98,204; gain ₹21,01,796; 20% = ₹4,20,359 (₹4,37,174 with cess)
Indexation saves over ₹3.4 lakh here. For property bought after 23 July 2024, only the 12.5% option is available. Reinvesting the gain in another house (Section 54) or specified bonds (54EC) can reduce or remove the tax.
Using the ₹1.25 Lakh Exemption Every Year
The ₹1.25 lakh exemption on equity gains is per financial year and cannot be carried forward. Long-term investors often book gains of up to ₹1.25 lakh each year and reinvest ("tax-gain harvesting"), so less gain is taxed when they finally sell.
Setting Off Losses
- Short-term capital losses can be set off against both short-term and long-term gains.
- Long-term losses can be set off only against long-term gains.
- Unused capital losses can be carried forward for 8 years if you file your return on time.
Frequently Asked Questions
What is the LTCG tax on equity in FY 2026-27?
12.5% on long-term gains above ₹1.25 lakh a year, plus cess, for listed shares and equity mutual funds held for more than 12 months.
What is the STCG tax rate on shares?
20% plus cess for listed shares and equity funds held for 12 months or less.
Is indexation still available on property?
Only for resident individuals and HUFs on land or buildings bought before 23 July 2024, who can pay the lower of 12.5% without indexation or 20% with indexation.
What is the CII for FY 2026-27?
384, as notified by CBDT. It was 376 for FY 2025-26.
This guide explains general rules for educational purposes and reflects the law as reviewed in October 2026. It is not tax or legal advice. For your own situation, please consult a Chartered Accountant or the official Income Tax Department and GST portals.