🧾 Tax & Investment

Capital Gains Tax India 2026 — Stocks, Mutual Funds, Property

Capital gains tax India 2026. LTCG on equity 12.5% above Rs 1.25 lakh. STCG 20%. Property LTCG 20% with indexation. Debt fund tax slab rate. How to save capital gains tax legally.

By FinMandi TeamMay 8, 202611 min read✓ May 2026 Updated

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Reviewed by FinMandi Research Team

Backed by 10+ years of banking experience · Verified May 2026

✓ RBI Sources ✓ Bank Verified ✓ May 2026

Quick Summary

Equity STCG (held < 1 year): 20% flat — increased from 15% in Budget 2024
Equity LTCG (held > 1 year): 12.5% on gains above Rs 1.25 lakh — no indexation
Property LTCG: 20% with indexation benefit (holding > 2 years)
Debt mutual fund: taxed as per income slab (no LTCG benefit from April 2023)
Rs 1.25 lakh annual LTCG exemption on equity — book profits strategically each year
Harvest losses: sell loss-making stocks to offset gains — saves capital gains tax
ELSS and PPF: no capital gains tax as these are not market instruments

Capital Gains Tax Rates India 2026

Asset Type	Holding Period	Tax Rate	Exemption
Equity Shares / Equity MF	Less than 1 year (STCG)	20%	None
Equity Shares / Equity MF	More than 1 year (LTCG)	12.5%	Rs 1.25L per year exempt
Debt Mutual Funds	Any period	As per slab (up to 30%)	None (changed Apr 2023)
Residential Property	Less than 2 years (STCG)	As per slab	None
Residential Property	More than 2 years (LTCG)	20%	With indexation
Gold (Physical)	More than 3 years (LTCG)	20%	With indexation
Gold ETF / Sovereign Gold Bond	More than 1 year	12.5%	Rs 1.25L exempt (Equity treatment for SGB)

LTCG Tax Saving Strategies

Rs 1.25 lakh annual harvest: Book equity profits up to Rs 1.25L every year — completely tax-free. Reinvest immediately. This resets your cost basis and saves tax over long term
Loss harvesting: Sell loss-making stocks to offset capital gains. Short-term losses can offset both STCG and LTCG. Long-term losses can only offset LTCG
Section 54/54F: Reinvest property sale proceeds into residential property within 2 years to exempt LTCG
Capital Gains Account Scheme: Deposit proceeds in government CGAS bank account if you need more time to reinvest

Annual LTCG Harvest Strategy: If you have equity portfolio of Rs 50 lakh with 15% CAGR, you gain Rs 7.5L per year. Book Rs 1.25L gain each year (tax-free), reinvest it. Over 10 years this saves approximately Rs 1.56 lakh in LTCG tax compared to booking all gains at end. Small annual action, significant long-term saving!

Also read: Income Tax Saving Tips · Best ELSS Funds · PPF vs ELSS vs NPS

Frequently Asked Questions

Long-term capital gains (LTCG) on equity shares and equity mutual funds held for more than 1 year is taxed at 12.5% on gains exceeding Rs 1.25 lakh per year. The first Rs 1.25 lakh of LTCG is completely tax-free. Budget 2024 increased LTCG exemption from Rs 1 lakh to Rs 1.25 lakh. STCG on equity held less than 1 year is taxed at 20% flat.

For residential property held more than 2 years: LTCG = Sale price – Indexed cost. Indexed cost = purchase price × (CII of sale year ÷ CII of purchase year). Tax = 20% on LTCG. You can save this tax by reinvesting in another residential property within 2 years (Section 54) or investing in Capital Gains Bonds (Section 54EC, up to Rs 50 lakh). For property held less than 2 years, gains are added to income and taxed at slab rate.

Yes. Equity mutual funds (65%+ in equity) held for more than 1 year: 12.5% LTCG on gains above Rs 1.25L per year. Debt mutual funds (any holding period): taxed at slab rate since April 2023 — no separate LTCG rate. Hybrid funds are taxed as equity or debt depending on their equity allocation. Always check the fund's equity allocation percentage before determining applicable tax rate.

📋 Sources & Methodology

Data sourced from: RBI official website · Official bank websites · SEBI · IRDAI · Ministry of Finance press releases. Rates and data verified by FinMandi Research Team. Last verified: May 2026. FinMandi does not accept payment to rank any bank or product.

Disclaimer: All information is as of May 2026. For educational purposes only. Verify with relevant institutions before making decisions.