Long-term capital gains tax: LTCG calculator for shares, mutual funds and property

Long-term capital gains tax in India is 12.5% for sales made in the tax year 2026-27. On listed shares and equity mutual funds held for more than 12 months, the first ₹1.25 lakh of gains each year is tax-free and the rest is taxed at 12.5% (section 198 of the Income-tax Act, 2025). Land, buildings, gold, unlisted shares and most other assets become long-term after 24 months and pay 12.5% without indexation (section 197). Resident individuals who sell a property bought before 23 July 2024 can instead pay 20% with indexation if that works out lower. Add 4% cess to all of these. The calculator above applies each rule to your own dates and prices. The sections below explain the rules and show worked examples.

How the LTCG calculator works

Pick the type of asset, then enter the two dates and the prices. The calculator first works out how long you held the asset. If that is more than the holding period for its type (12 or 24 months), the gain is long-term. The capital gain is the sale price minus selling expenses and the cost. For shares bought before 1 February 2018, the cost is the grandfathered value explained below. For property, the cost also includes improvements. The calculator then takes off what is not taxed and applies the rate:

• for equity, the ₹1.25 lakh yearly exemption, less any equity gains you have already made this year;
• for any resident, the unused part of the basic exemption limit if your other income is below it;
• for property, the amount you put into a new house or capital gains bonds.

For a property bought before 23 July 2024 it computes both the 12.5% and the indexed 20% figure and charges the lower one, which is what section 197(3) allows. Short-term equity gains are taxed at 20%. Other short-term gains are added to your income at slab rates, so for those the calculator shows the gain and leaves the tax to the income tax calculator.

LTCG tax rates for 2026-27

Since 1 April 2026 capital gains are taxed under the Income-tax Act, 2025, which replaced the 1961 Act. The rates did not change with the new Act. They are the same rates the Finance (No. 2) Act, 2024 brought in from 23 July 2024, renumbered: old section 112A is now section 198, 112 is 197 and 111A is 196.

4% health and education cess is added to every figure in the table. Surcharge also applies when total income is above ₹50 lakh, and the calculator does not add it.

When is a gain long-term: 12 months or 24 months?

Section 2(101) of the new Act defines a short-term capital asset as one held for not more than 24 months before it is sold. For four kinds of asset the limit is 12 months instead: securities listed on a recognised stock exchange in India, units of the UTI, units of equity-oriented funds and zero-coupon bonds. So the answer to “is LTCG 24 months or 36 months?” is neither for shares (12 months) and 24 months for property. The 36-month rule for unlisted assets ended on 23 July 2024.

Count from the date of purchase to the date of sale. For shares bought in several lots, the oldest shares are treated as sold first (first-in, first-out, section 67(7)(c) for demat holdings). Some of your sale may therefore be long-term and some short-term. If you sell exactly on the anniversary, the holding is arguably not “more than” 12 months, so sell at least a day later to be safe. The calculator treats a sale on the anniversary as short-term.

LTCG on shares and equity mutual funds

Section 198 applies when three conditions are met. The gain is long-term. The asset is an equity share, a unit of an equity-oriented fund or a unit of a business trust. Securities transaction tax was paid on both purchase and sale for shares, or on the sale for fund units. An equity-oriented fund is one that keeps at least 65% of its money in listed Indian equity, so most equity, ELSS, index and aggressive hybrid funds qualify. Gains up to ₹1,25,000 in a tax year are exempt. The limit is per person per year, across all your equity sales, not per stock or per fund. The rest is taxed at 12.5% with no indexation.

Worked example. You bought shares for ₹5,00,000 on 10 June 2023 and sold them for ₹8,00,000 on 15 September 2026, after 39 months, so the gain is long-term. The gain is ₹3,00,000. After the ₹1,25,000 exemption, ₹1,75,000 is taxed at 12.5%, which is ₹21,875. With 4% cess the total is ₹22,750. These are the calculator’s default inputs.

The basic exemption still helps. A resident whose other income is below the basic exemption limit can set the unused part against the gain (s.198(3)). Take a retiree with ₹2,00,000 of pension and interest under the new regime, where the limit is ₹4,00,000. If they sell the same shares for ₹10,00,000, the gain is ₹5,00,000. Taking off the ₹1,25,000 exemption and the unused ₹2,00,000 leaves ₹1,75,000 taxable, and the tax is ₹22,750 with cess.

Shares bought before 1 February 2018: the grandfathered cost

Long-term gains on listed equity were tax-free until 31 January 2018. To keep gains made before that date out of tax, section 90(7) sets the cost of shares and equity fund units bought before 1 February 2018 at the higher of two values. The first is what you actually paid. The second is the lower of their value on 31 January 2018 (the highest quoted price that day, or the NAV for funds) and the sale price. For example, a share bought in 2016 for ₹100, valued at ₹250 on 31 January 2018 and sold for ₹400, has a cost of ₹250 and a taxable gain of ₹150, not ₹300. Enter the 31 January 2018 value in the calculator’s extra field to apply this.

LTCG on property: 12.5% flat or 20% with indexation

A house, flat, plot or commercial building held for more than 24 months is a long-term capital asset. The rate is 12.5% on the gain computed without indexation. Section 197(3) keeps the old choice for one group. A resident individual or HUF selling land or a building acquired before 23 July 2024 can compute the tax a second way: 20% on the gain after indexing the cost. They then pay whichever is lower. Legally, the “excess” of the 12.5% figure over the 20% figure is ignored, which comes to the same thing.

Indexation raises the cost in line with the Cost Inflation Index (CII). The indexed cost is the cost × CII of the year of sale ÷ CII of the year of purchase. For property bought before 1 April 2001, the cost may be taken as the fair market value on 1 April 2001, capped at the stamp duty value on that date (s.90(9) and (10)), and indexed from 2001-02. Improvements are indexed from the year they were made. Cost of improvement means additions and construction, not repairs or maintenance.

Example A: bought in 2015. A flat bought for ₹40 lakh in June 2015 is sold for ₹1 crore in October 2026, with ₹1 lakh of brokerage. Without indexation the gain is ₹59,00,000 and the tax at 12.5% is ₹7,37,500. With indexation the cost becomes ₹40 lakh × 384 ÷ 254 = ₹60,47,244, the gain ₹38,52,756 and the tax at 20% ₹7,70,551. The flat 12.5% is lower, so that applies: ₹7,67,000 with cess.

Example B: bought in 2005. A flat bought for ₹20 lakh in August 2005 and sold on the same terms has an unindexed gain of ₹79,00,000, which means ₹9,87,500 at 12.5%. Its indexed cost is ₹20 lakh × 384 ÷ 117 = ₹65,64,103, which leaves a gain of ₹33,35,897 and ₹6,67,179 at 20%. Indexation saves ₹3,20,321, and the total payable is ₹6,93,866.

Which one wins? The two taxes are equal when the net sale price is (8r − 5) ÷ 3 times the cost, where r is the CII ratio. Below that multiple, indexation gives the lower tax. Above it, the flat 12.5% does. For a sale in 2026-27:

A property that has merely kept up with inflation is better off indexed. One that has grown much faster than the index is better off at 12.5%. Improvement costs move the line, so use the calculator rather than the table for a real sale. The indexation choice is not available to non-residents, companies or firms, or for property bought on or after 23 July 2024.

Cost Inflation Index table

The Central Government notifies the CII each year at 75% of the average rise in the urban consumer price index (s.72(8)(a)). The figure for 2026-27 is 384, notified on 15 July 2026 (S.O. 3889(E)).

Mutual funds: which ones get 12.5%?

• Equity funds (65% or more in listed Indian equity): long-term after 12 months, 12.5% above ₹1.25 lakh under s.198. Short-term gains are taxed at 20%.
• Debt funds bought on or after 1 April 2023, defined as funds with more than 65% in debt and money-market instruments: section 76 treats every gain as short-term, whatever the holding period, and taxes it at your slab rate. Units bought before 1 April 2023 are outside section 76. They become long-term after 24 months and pay 12.5% without indexation.
• Everything in between: gold and silver funds, international funds, funds of funds and hybrids with 35–65% equity. These are neither equity-oriented nor “specified” under section 76, so they are long-term after 24 months (12 months if the units are listed, like an ETF) and taxed at 12.5% under s.197.

How to save LTCG tax: sections 82, 85 and 86

The reinvestment exemptions kept their substance in the new Act but changed numbers.

• Section 82 (old 54): sell a house, buy a house. The long-term gain on a residential house is exempt to the extent you buy one house in India within one year before or two years after the sale, or build one within three years. If the gain is ₹2 crore or less, you may buy two houses instead, once in a lifetime. Gains above ₹10 crore and house cost above ₹10 crore do not count.
• Section 85 (old 54EC): capital gains bonds. The long-term gain on land or a building is exempt to the extent you invest it within six months in bonds redeemable after five years, such as those issued by NHAI, REC and other notified issuers. The limit is ₹50 lakh across the year of sale and the next year. Selling or borrowing against the bonds within five years brings the exemption back to tax.
• Section 86 (old 54F): sell anything else, buy a house. Long-term gains on shares, gold or a plot are exempt in proportion to how much of the net sale price you put into one residential house: house cost ÷ net consideration × gain. You must not own more than one other house on the date of sale. The ₹10 crore cap applies here too.

Money not yet invested by the return due date must be parked in the Capital Gains Account Scheme with a bank to keep the s.82 and s.86 exemptions. In the calculator, the reinvestment field (shown for land or building) applies s.82 and s.85. For s.86, work out the proportional exemption first and reduce the sale price by it.

Why the ₹12 lakh rebate does not cover LTCG

In the new regime, section 156(2) wipes out tax up to ₹60,000 for a resident with total income up to ₹12 lakh. Section 156(3) caps that rebate at the tax computed at the normal slab rates of section 202(1). Section 198(7) then says the rebate comes off tax on income other than equity LTCG. So a person earning ₹8 lakh from salary who also makes ₹3 lakh of equity LTCG pays nothing on the salary, but does pay 12.5% on the gain above ₹1.25 lakh. The capital gain also counts towards the ₹12 lakh total income test. What does help, as shown above, is the unused basic exemption limit when other income is below ₹4 lakh (new regime) or ₹2.5 lakh (old regime; ₹3 lakh at 60 and ₹5 lakh at 80).

Capital losses: set-off and carry forward

A long-term capital loss can be set off only against long-term gains. A short-term loss can be set off against either kind. Neither can be set off against salary or other income. A loss you cannot use this year is carried forward for up to eight tax years, keeping the same restriction, but only if you file the return by the due date (s.108, s.111 and s.121). Booking losses in March against gains made earlier in the year (“tax-loss harvesting”) is legal. So is selling equity worth up to ₹1.25 lakh of gains each year and buying back, which uses the exemption that would otherwise lapse.

Old and new section numbers

Notices, AIS entries and older articles still quote the 1961 Act. Each pair below is linked in the 2025 Act’s own cross-reference notes.

Reporting LTCG and paying the tax

Capital gains go in the capital gains schedule of the return for the tax year of sale. Equity sales are listed scrip by scrip for gains above the exemption. Brokers’ capital gains statements and the AIS give the figures. There is no TDS on a resident’s share sale, so a large gain may require advance tax in the instalment after the sale. Missed advance tax is charged interest, the same mechanism explained on the tax calendar. When you sell immovable property for ₹50 lakh or more, the buyer deducts TDS of 1% of the price or the stamp duty value, whichever is higher (s.393). You claim it back in the return. See the TDS rate chart.

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