income tax

Published on 4 April 2025

Capital Gains Tax in India: STCG & LTCG Rules for 2024–25

What Exactly Is Capital Gains Tax?

Think of capital gains tax as the government’s cut when you make a profit selling something valuable—shares, mutual funds, property, digital assets, you name it. The tax isn’t triggered while you’re holding the asset; it only comes into play when you sell. Now, how much you pay depends on how long you held the asset before selling—this is where the terms Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG) come in.

Short-Term Capital Gains (STCG): The New Playbook

How Do You Know If It’s Short-Term?

  • If you sell listed securities (like stocks or equity mutual funds) within 12 months of buying, that’s STCG.
  • For unlisted shares, property, or other assets, the window is 24 months—sell before that, and you’re looking at STCG.

What’s the Tax Rate?

  • Here’s the headline: For listed securities, the STCG tax rate has jumped to 20% (it used to be 15%). This is a flat rate, so it doesn’t matter what your income slab is.
  • For unlisted shares, property, and other assets, your STCG gets taxed according to your individual income tax slab.
  • And yes, surcharge and health & education cess still apply, depending on your total income.

Long-Term Capital Gains (LTCG): What’s Changed?

When Does Your Gain Become ‘Long-Term’?

  • For listed securities, hold them for more than 12 months and you’re in LTCG territory.
  • For unlisted shares, property, or other assets, the holding period is over 24 months.

How Much Tax Will You Pay?

  • The big news: There’s now a uniform LTCG tax rate of 12.5% across all asset classes, but only for assets you bought after July 23, 2024.
  • For listed shares and equity-oriented mutual funds, the first Rs 1.25 lakh of LTCG per year is tax-free. Anything above that is taxed at 12.5%.
  • The indexation benefit (which let you adjust your purchase price for inflation and pay less tax) is gone for most assets bought after July 23, 2024.
  • If you bought the asset before July 23, 2024, you get to choose: pay 12.5% without indexation, or 20% with indexation—whichever works out better for you.

Key Details and Nuances You Shouldn’t Miss

  • Higher Exemption Limit: The LTCG exemption for listed equity and equity-oriented funds is now Rs 1.25 lakh per financial year.

  • No Indexation for New Assets: For most assets bought after July 23, 2024, you can’t use indexation. For older assets, you can still opt for indexation if it saves you money.

  • One-Time Set-off of LTCL Against STCG: If you rack up long-term capital losses by March 31, 2026, you can set them off against both LTCG and STCG from FY 2026–27 onwards. This is a rare chance to cut your tax bill, so keep an eye on your losses.

  • Same Rules for Residents and NRIs: The capital gains tax rules now apply equally to both residents and non-residents, including foreign investors.

  • Crypto Is Now Officially Taxed: Digital assets like cryptocurrency are now formally included as taxable capital assets under the new law.

  • Reporting Gets Stricter: The new ITR forms require you to report capital gains separately for transactions before and after July 23, 2024.

  • Grandfathering Clause: For property and other assets bought before July 23, 2024, you have the option to choose between the old regime (20% with indexation) and the new regime (12.5% without indexation) for LTCG.

  • Surcharge and Cess: These still apply based on your total income, including capital gains.

Smart Moves to Save on Capital Gains Tax

  • Time Your Sales: If you can, hold onto listed assets for more than 12 months and other assets for more than 24 months to get the lower LTCG rate.

  • Use Exemptions: Investing in new property or specified bonds (like Section 54EC bonds) can help you claim exemptions on LTCG.

  • Tax-Loss Harvesting: Offset your gains with capital losses to reduce your taxable income. This is especially useful with the new one-time set-off rule.

  • Choose the Best Regime: For assets bought before July 23, 2024, do the math under both regimes and pick the one that gives you the lowest tax bill.

Quick Q&A: What Everyone’s Asking

  • What’s the current LTCG tax rate on listed shares?

  • You pay 12.5% on gains exceeding Rs 1.25 lakh per year, with no indexation for assets bought after July 23, 2024.

  • Can I still use indexation for property sales?

  • Only if you bought the property before July 23, 2024. For these, you can pick between 20% with indexation or 12.5% without indexation.

  • Are capital gains from cryptocurrency taxable?

  • Yes, digital assets like crypto are now taxed as capital assets under the new law.

  • What’s the new STCG tax rate for listed shares?

  • It’s now a flat 20% if you sell within 12 months of buying.