Taxes
India — Tax: Capital Gains
For FY 2026-27, long-term capital gains (LTCG) on listed equity/equity mutual funds held over 12 months are taxed at 12.5% above a ₹1.25 lakh annual exemption, with short-term gains (STCG, held ≤12 months) taxed at 20%. For property and most other assets, the holding period for long-term treatment is over 24 months; for transfers made on or after 23 July 2024, indexation benefit is no longer available — sellers pay a flat 12.5% LTCG rate (the older 20%-with-indexation option only applies to pre-23 July 2024 purchases). The Cost Inflation Index (CII) for FY 2026-27 is notified at 384 for relevant legacy indexation calculations.
Key facts
- Listed equity/equity mutual funds: LTCG (>12 months) taxed at 12.5% above a ₹1.25 lakh annual exemption; STCG (≤12 months) taxed at 20%.
- Property and most other assets: long-term threshold is holding period over 24 months.
- Indexation is no longer available for transfers on or after 23 July 2024 — flat 12.5% LTCG applies instead of the older 20%-with-indexation option (which still applies to pre-23 July 2024 purchases where elected).
- Cost Inflation Index (CII) for FY 2026-27 is 384, relevant only for eligible legacy indexation calculations.
Required documents
- Purchase and sale deeds/contract notes
- Records of acquisition cost and date
- Broker/demat statements for securities
Common mistakes
- Assuming indexation still applies to a post-23 July 2024 property sale — it does not; only the flat 12.5% rate applies.
- Applying the 12-month equity holding threshold to property, where the long-term threshold is 24 months.