STCG vs LTCG — Short Term vs Long Term Capital Gains
| Asset Type | Holding for LTCG | STCG Tax Rate | LTCG Tax Rate |
|---|
| Equity Shares / Equity MF | >12 months | 20% (Budget 2024) | 12.5% on gains >₹1.25L |
| Debt Mutual Funds | >24 months | As per slab | As per slab (post-Apr 2023) |
| Property / Real Estate | >24 months | As per slab | 12.5% (no indexation) OR 20% (with indexation) |
| Gold / Other Assets | >36 months | As per slab | 12.5% (Budget 2024) |
| Unlisted Shares | >24 months | As per slab | 12.5% |
Budget 2024 Changes — What Changed
- STCG on equity raised: Short-term capital gains tax on equity and equity mutual funds increased from 15% to 20% (effective July 23, 2024).
- LTCG on equity raised: Long-term capital gains tax increased from 10% to 12.5%, but the exemption limit was also raised from ₹1 lakh to ₹1.25 lakh per year.
- Property indexation: For property sold after July 23, 2024, taxpayers can choose between 12.5% LTCG without indexation or 20% LTCG with indexation — whichever results in lower tax.
- Debt MF (post Apr 2023): Gains from debt mutual funds purchased after April 1, 2023 are taxed at slab rates regardless of holding period. The 20% LTCG with indexation benefit was removed.
- Holding period standardised: LTCG holding period for most listed assets set at 12 months, unlisted and debt at 24 months, gold and real estate at 24 months.
LTCG Grandfathering for Equity (Pre-January 31, 2018)
📅 Grandfathering Clause: For equity shares and equity mutual funds purchased before January 31, 2018, the cost of acquisition is deemed to be the higher of: (a) actual purchase price, or (b) the Fair Market Value (FMV) as on January 31, 2018. This protects gains accrued before LTCG was re-introduced. Our calculator uses the actual purchase price — consult a CA for grandfathered calculations.
Frequently Asked Questions
What is the ₹1.25 lakh LTCG exemption on equity?
Long-term capital gains from equity shares and equity mutual funds up to ₹1,25,000 per financial year are completely exempt from tax. Only gains above this threshold are taxed at 12.5%. Example: If your LTCG is ₹2,00,000, tax = 12.5% × (₹2,00,000 − ₹1,25,000) = 12.5% × ₹75,000 = ₹9,375.
Can I set off capital losses against capital gains?
Yes, within the same year: Short-term losses can be set off against both STCG and LTCG. Long-term losses can only be set off against LTCG. Unabsorbed capital losses can be carried forward for 8 assessment years. You must file your ITR by the due date to carry forward losses.
Is capital gains tax applicable on SIP mutual fund redemption?
Yes. Each SIP instalment is treated as a separate investment with its own purchase date. When you redeem, units purchased more than 12 months ago (for equity funds) are treated as LTCG at 12.5% (above ₹1.25L), and units held less than 12 months are STCG at 20%. Many fund houses provide capital gains statements to help with ITR filing.
What is Section 54 exemption for property?
If you sell a residential property and use the LTCG to purchase another residential property within 2 years (or construct within 3 years), you can claim exemption under Section 54. The exemption is limited to ₹10 crore (Budget 2023 cap). Unused gains can be deposited in the Capital Gains Account Scheme (CGAS) before the ITR filing deadline to claim the exemption.
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CalcBharat.com Finance Team
Tax & Investment Experts
Capital gains tax rates as per the Finance Act 2024, applicable from July 23, 2024. For complex cases involving grandfathering, indexation, or set-off of losses, consult a Chartered Accountant. Last updated: April 2026.