The post-23-July-2024 capital gains regime
The Budget of July 2024 rewrote capital gains tax for most assets, effective 23 July 2024. Two things changed together: tax rates were simplified (mostly lowered), and the indexation benefit — which adjusted your cost of acquisition for inflation before taxing the gain — was withdrawn for most assets, except as a grandfathered option for property bought before the cutoff date. Here's the summary this calculator uses:
| Asset | Long-term holding period | Short-term rate | Long-term rate |
|---|---|---|---|
| Listed equity / equity mutual funds (STT paid) | > 12 months | 20% | 12.5%, over a ₹1,25,000 exemption per year |
| Property (land / building) | > 24 months | Slab rate (added to your income) | 12.5% flat, or 20% with indexation if bought before 2024-07-23 |
| Other assets (gold, unlisted shares, foreign shares incl. RSUs, etc.) | > 24 months | Slab rate | 12.5%, no indexation |
A 4% Health & Education cess applies on top of whichever tax figure results, same as for regular income tax.
Property: indexation is now the exception, not the rule
For property bought on or after 23 July 2024, long-term gains are taxed at a flat12.5% with no indexation option at all. For property boughtbefore that date, you get to choose: pay 12.5% on the gain computed without indexation, or 20% on the gain computed after indexing your cost using the Cost Inflation Index (CII) — and you're allowed to pick whichever is cheaper. This calculator computes both automatically and highlights the lower one.
Worked example — equity LTCG
Say you bought equity mutual fund units for ₹5,00,000 and sold them 2+ years later for ₹9,00,000, with no LTCG exemption used elsewhere this year. Your gain is ₹4,00,000; after the ₹1,25,000 annual exemption, ₹2,75,000 is taxable at 12.5% = ₹34,375, plus 4% cess of ₹1,375, for a total tax of ₹35,750 — an effective rate of under 9% on the full gain, thanks to the exemption.
Grandfathering for old equity holdings
If you bought listed equity shares or equity mutual fund units on or before 2018-01-31, your cost of acquisition for LTCG purposes is the higher of the actual purchase price or the fair market value (FMV) on that date — a rule carried over from the original 2018 LTCG reintroduction, and still relevant today for long-held portfolios.
Sections 54, 54F and 54EC — reinvestment exemptions
Property capital gains have several reinvestment routes that can reduce or eliminate the tax shown above — this calculator does not compute them, but it's worth knowing they exist:
- Section 54: exempts LTCG on a residential property if the gain is reinvested in another residential property within the specified time window.
- Section 54F: a similar exemption when the asset sold is not a residential house (e.g. land, or other property) but the sale proceeds are invested in a residential house.
- Section 54EC: exempts LTCG (up to a cap) if invested in specified capital gains bonds (e.g. NHAI/REC) within 6 months of the sale, even without buying another property.
Each has its own conditions, holding/lock-in periods, and caps — talk to a CA before relying on one, especially for large transactions.