When you sell a capital asset — shares, mutual funds, property, gold — for more than its cost, the profit is a capital gain and is taxable. How it is taxed depends on the asset and how long you held it.
This guide explains short-term vs long-term capital gains, holding periods, and key exemptions.
What is Capital Gains Tax in India?
Capital gains are split into short-term (STCG) and long-term (LTCG) based on the holding period, which differs by asset class. LTCG often gets a lower rate and, for some assets, indexation or an exemption threshold.
Listed equity and equity mutual funds have their own rates; property and unlisted assets are taxed differently.
| Listed equity — LTCG | Long-term if held over 12 months |
|---|---|
| Property — LTCG | Long-term if held over 24 months |
| Debt funds | Taxed as per current rules on holding period |
| Reinvestment exemptions | Sections 54, 54F, 54EC for property/bonds |
Frequently asked questions
What is the holding period for long-term capital gains on shares?
Listed equity shares and equity mutual funds are long-term if held for more than 12 months.
Can I save tax on property capital gains?
Yes — by reinvesting under Sections 54/54F (in a house) or 54EC (in specified bonds), subject to conditions.