Logo
Financial Calculator

Capital Gains Tax Calculator India 2025-26

Calculate LTCG and STCG tax on property sale, shares, equity mutual funds, and debt investments. Compare short-term vs long-term capital gains, use indexation benefits, and optimize your tax liability with step-by-step calculations.

Property Tax CalculatorShares & Mutual FundsIndexation CalculatorLTCG vs STCG₹1 Lakh Exemption

Equity & Mutual Funds

Stocks, ELSS, Equity MF

Debt & Other Assets

Bonds, FDs, Gold, Property

₹

One Lakh rupees

₹1K₹1Cr
₹

One Lakh Fifty Thousand rupees

₹1K₹1.5Cr
months
1 month120 months

Capital Gains Tax on Sale of Property in India

Calculating capital gains tax on property sale in India requires understanding the holding period, purchase price, sale price, and applicable tax rates. For long-term capital gain tax on property (holdings of 24 months or more), you can use indexation to significantly reduce your tax liability. The capital gain tax calculator on property helps you estimate your tax obligations accurately.

When you sell a property in India, the capital gains are classified as short-term (holdings under 24 months) or long-term (holdings of 24 months or more). Short-term capital gains on property are added to your total income and taxed at your applicable income tax slab rate. Long-term capital gains on property are taxed at 20% with indexation benefits, which adjusts your purchase price for inflation, reducing your taxable gains. Using a capital gain tax calculator on property with indexation can help you understand the tax savings potential.

Short-Term Capital Gains on Property

Holding Period

Less than 24 months

Tax Rate

As per Income Tax Slab

5%, 20%, or 30% based on total income

Indexation

Not Available

Long-Term Capital Gains on Property

Holding Period

24 months or more

Tax Rate

20%

With indexation benefits

Indexation

Available - Reduces Taxable Gains

Example: Capital Gains Tax Calculation on Property Sale in India

Property Purchase (2019-20)

₹50,00,000

Property Sale (2024-25)

₹75,00,000

CII (Purchase Year): 289

CII (Sale Year): 363

Holding Period: 60 months (LTCG)

With Indexation:

Indexed Cost = ₹50,00,000 × (363 ÷ 289) = ₹62,80,277

Taxable Gain = ₹75,00,000 - ₹62,80,277 = ₹12,19,723

Tax @ 20% = ₹2,43,945

Without Indexation (if applicable):

Capital Gain = ₹75,00,000 - ₹50,00,000 = ₹25,00,000

Tax @ 20% = ₹5,00,000

Savings with Indexation: ₹2,56,055

Capital Gains Tax Rules FY 2025-26

Equity & Equity Mutual Funds

Short-term (< 12 months)20%
Long-term (≥ 12 months)12.5%
LTCG Exemption₹1 Lakh/year

Debt & Other Assets

Short-term (< 36 months)As per slab
Long-term with indexation20%
Long-term without indexation25%

Capital Gains Tax Planning Strategies

Tax Optimization Tips

  • Hold equity investments for 12+ months for LTCG benefits
  • Use ₹1 lakh LTCG exemption annually on equity gains
  • Consider tax-loss harvesting to offset gains
  • Time your sales across financial years strategically
  • Use indexation benefits for debt investments

Important Considerations

  • Maintain proper records of all transactions
  • Pay advance tax if liability exceeds ₹10,000
  • Include STT and brokerage costs in calculations
  • Set off capital losses against gains properly
  • Consult a tax advisor for complex situations

Capital Gains Tax by Asset Type

Equity Investments

Stocks, Equity MF, ELSS

  • • STCG: 20% (< 12 months)
  • • LTCG: 12.5% (≥ 12 months)
  • • Annual exemption: ₹1 lakh
  • • No indexation benefit
  • • Lower holding period requirement

Debt Investments

Debt MF, Bonds, FDs

  • • STCG: As per tax slab (< 36 months)
  • • LTCG: 20% with indexation
  • • LTCG: 25% without indexation
  • • Indexation benefit available
  • • Higher holding period (36 months)

Real Estate

Property, Land

  • • STCG: As per tax slab (< 24 months)
  • • LTCG: 20% with indexation
  • • Multiple exemptions available
  • • Section 54, 54F, 54EC benefits
  • • Higher transaction costs

How to Calculate Capital Gains Tax in India - Step by Step Guide

Calculating capital gains tax involves three main steps: determining your cost basis, computing your gain or loss and holding period, and applying the correct tax rate with any applicable exemptions. Our capital gains tax calculator automates this process, but understanding the calculation method helps you make informed decisions.

1

Determine Cost Basis

Your cost basis is the original purchase price of the asset, including any additional expenses like brokerage fees, stamp duty, or legal fees. For property sales, include registration charges and improvement costs.

Example:

Purchase Price: ₹10,00,000
+ Brokerage: ₹5,000
= Cost Basis: ₹10,05,000

2

Compute Gain & Holding Period

Calculate your capital gain by subtracting cost basis from sale price. Determine the holding period (days/months between purchase and sale) to classify as STCG or LTCG.

Example:

Sale Price: ₹15,00,000
- Cost Basis: ₹10,05,000
= Capital Gain: ₹4,95,000

Holding: 24 months = LTCG

3

Apply Tax Rate & Exemptions

Apply the appropriate tax rate based on asset type and holding period. For LTCG on equity, subtract ₹1 lakh exemption. For debt/property, use indexation if beneficial (20% vs 25%).

Example (Equity LTCG):

Gain: ₹4,95,000
- Exemption: ₹1,00,000
= Taxable: ₹3,95,000
Tax @ 12.5%: ₹49,375

Important Notes for Capital Gains Tax Calculation in India

  • • For property sales, include stamp duty, registration charges, and improvement costs in your cost basis
  • • STT (Securities Transaction Tax) paid on equity sales cannot be deducted from capital gains
  • • Long-term capital gains on property can benefit from indexation, reducing taxable gains significantly
  • • Short-term capital gains are added to your total income and taxed at your applicable slab rate
  • • Keep all purchase receipts, sale contracts, and expense documents for tax filing and potential audits

How Much Capital Gain is Tax Free in India?

As per Section 112A of the Income Tax Act, sale of listed equity shares, equity-oriented mutual funds, or units of business trust after 12 months (24 months for units) attracts long-term capital gains tax of 12.5%. However, taxpayers can claim exemption up to ₹1 lakh on long-term capital gains from equity investments every financial year. This means any LTCG up to ₹1 lakh is completely tax-free, and only gains above this threshold are taxed at 12.5%.

Long-Term Capital Gains (LTCG) Exemption

Annual Exemption Limit

₹1,00,000

Per financial year for equity LTCG

Applicable for:

  • Listed equity shares held for 12+ months
  • Equity-oriented mutual funds held for 12+ months
  • Units of business trust held for 24+ months

Example: If you have LTCG of ₹3,50,000 from equity investments, you pay tax only on ₹2,50,000 (₹3,50,000 - ₹1,00,000) at 12.5% = ₹31,250.

Short-Term Capital Gains (STCG)

No Exemption Available

0

Full gains are taxable

Tax Rates:

  • Equity: 20% (holdings < 12 months)
  • Debt/Property: As per income tax slab
  • No exemption for short-term gains

Important: STCG on equity is always taxable at 20% with no exemption. For debt and property, STCG is added to your total income and taxed at your applicable slab rate (5%, 20%, or 30%).

Tax-Free Capital Gains Strategies

  • • Plan your equity sales to stay within ₹1 lakh LTCG exemption each year
  • • Spread large gains across multiple financial years to maximize exemptions
  • • Use tax-loss harvesting to offset capital gains with capital losses
  • • Consider holding equity investments for 12+ months to qualify for LTCG benefits
  • • For property sales, use reinvestment exemptions (Section 54, 54F, 54EC) for complete tax exemption
  • • Keep track of all capital gains throughout the year to optimize tax planning

Capital Gains Tax Types & Applicable Rates in India

Understanding capital gains tax is crucial for effective tax planning in India. Capital gains tax applies when you sell capital assets like property, shares, mutual funds, bonds, or gold at a profit. In India, capital gains are classified into two main categories: Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG). The tax rates vary significantly based on the asset type, holding period, and whether you choose indexation benefits.

For equity investments like stocks and equity mutual funds sold in India, STCG applies at 20% for holdings less than 12 months, while LTCG is taxed at 12.5% for holdings of 12 months or more, with an annual exemption of ₹1 lakh. When calculating capital gains tax on shares or equity mutual funds, any gains up to ₹1 lakh in a financial year are tax-free for long-term holdings.

For capital gains tax on property sale in India, the rules differ: STCG (holdings under 24 months) is taxed as per your income tax slab, while LTCG (holdings of 24 months or more) is taxed at 20% with indexation benefits. Calculating capital gains tax on sale of property requires considering the purchase price, sale price, and applying the Cost Inflation Index (CII) for long-term holdings.

Debt instruments, bonds, and fixed deposits follow different rules: STCG is taxed as per your income tax slab for holdings under 36 months, while LTCG can be taxed at either 20% with indexation or 25% without indexation for holdings of 36 months or more. Using a capital gains calculator with indexation can help you determine the optimal tax calculation method and potentially save thousands in taxes. Understanding these distinctions helps Indian investors make informed decisions about when to sell assets and how to optimize their tax liability using indexation and exemptions.

Detailed Tax Rate Breakdown by Asset Type

Equity Investments

STCG20%

< 12 months

LTCG12.5%

≥ 12 months

₹1L exemption/year

Debt Investments

STCGAs per slab

< 36 months

LTCG (Indexed)20%

≥ 36 months

LTCG (Non-Indexed)25%

≥ 36 months

Real Estate

STCGAs per slab

< 24 months

LTCG20%

≥ 24 months

With indexation

Understanding Indexation Benefits for Capital Gains Tax

Indexation is a powerful tax-saving mechanism available for long-term capital gains on debt instruments, bonds, fixed deposits, and real estate properties. The concept of indexation recognizes that inflation erodes the purchasing power of money over time. When you purchase an asset and sell it years later, the apparent profit includes both real gains and inflationary gains. Indexation adjusts your purchase price for inflation using the Cost Inflation Index (CII) published by the Income Tax Department, effectively reducing your taxable capital gains and resulting in significant tax savings.

For debt investments and real estate held for more than 36 months (or 24 months for property), you have the option to choose between two tax calculation methods: 20% tax with indexation or 25% tax without indexation. In most cases, choosing indexation results in lower tax liability because it reduces the taxable capital gains amount. The indexed cost of acquisition is calculated by multiplying the original purchase price by the ratio of CII in the year of sale to CII in the year of purchase. This adjustment accounts for inflation, ensuring you only pay tax on real gains rather than nominal gains inflated by rising prices.

The Cost Inflation Index is updated annually by the government to reflect inflation trends. For example, if you purchased a debt mutual fund in FY 2019-20 (CII: 289) and sold it in FY 2024-25 (CII: 363), your purchase price gets adjusted upward by approximately 25.6%, significantly reducing your taxable gains. This benefit becomes more pronounced the longer you hold the asset, as the inflation adjustment compounds over time. Indexation is particularly valuable for investors in debt mutual funds, bonds, and real estate, where holding periods are typically longer and inflation impact is more significant.

Indexation Calculation Example

Scenario: Debt Mutual Fund Investment

Purchase Date

April 2020 (FY 2020-21)

Sale Date

March 2025 (FY 2024-25)

Purchase Price

₹10,00,000

Sale Price

₹15,00,000

CII (Purchase Year - 2020-21)

301

CII (Sale Year - 2024-25)

363

Without Indexation (25% Tax Rate)

Capital Gains

₹15,00,000 - ₹10,00,000 = ₹5,00,000

Tax @ 25%

₹1,25,000

With Indexation (20% Tax Rate)

Indexed Cost of Acquisition

₹10,00,000 × (363 ÷ 301) = ₹10,00,000 × 1.206

₹12,06,000

Indexed Capital Gains

₹15,00,000 - ₹12,06,000

₹2,94,000

Tax @ 20%

₹58,800

Tax Savings with Indexation

₹66,200

(₹1,25,000 - ₹58,800)

Savings Percentage

53%

Lower tax with indexation

Key Takeaway: By using indexation, your taxable capital gains reduced from ₹5,00,000 to ₹2,94,000, and even with a lower tax rate (20% vs 25%), you save ₹66,200 in taxes. This demonstrates why indexation is almost always beneficial for long-term debt investments and real estate.

Tax Exemptions on Reinvestment of Capital Gains

The Income Tax Act provides several exemptions when you reinvest your capital gains from property sales into specified assets within prescribed time limits. These exemptions can significantly reduce or eliminate your capital gains tax liability, making them powerful tax-saving tools for property investors.

54

Section 54

Reinvestment in Residential Property

  • •Exemption on LTCG from property sale
  • •Must purchase new residential property within 1 year before or 2 years after sale
  • •Or construct within 3 years of sale
  • •Full exemption up to reinvestment amount
54F

Section 54F

Reinvestment for Non-Resident Property

  • •Exemption on LTCG from any asset (not just property)
  • •Must purchase residential property within 1 year before or 2 years after sale
  • •Or construct within 3 years of sale
  • •Full exemption if entire sale proceeds reinvested
54EC

Section 54EC

Investment in Specified Bonds

  • •Exemption on LTCG from property sale
  • •Invest in REC, NHAI, or PFC bonds
  • •Must invest within 6 months of sale
  • •Maximum exemption: ₹50 lakh per financial year
  • •Lock-in period: 5 years

Important Points to Remember

  • • You cannot claim multiple exemptions for the same capital gains
  • • If you sell the new property within 3 years, the exemption is reversed
  • • For Section 54EC bonds, premature withdrawal results in loss of exemption
  • • Keep all purchase/construction documents and investment proofs for tax filing
  • • Consult a tax advisor to determine the best exemption strategy for your situation

Capital Gains Tax Scenarios

Short Term Capital Gains (STCG)

Equity Investments

20%

Holding period < 12 months

Debt/Other Assets

As per income tax slab

Holding period < 36 months

Long Term Capital Gains (LTCG)

Equity Investments

12.5%

Holding period ≥ 12 months

₹1 Lakh annual exemption

Debt/Other Assets

20%

(with indexation)

or

25%

(without indexation)

Holding period ≥ 36 months

Tax Saving Tips for Capital Gains

Strategic Planning

  • Hold equity investments for more than 12 months to qualify for LTCG benefits at 12.5% instead of 20%
  • Use ₹1 lakh LTCG exemption on equity gains annually to reduce tax liability
  • Time your sales across financial years strategically to maximize exemptions
  • Consider tax-loss harvesting to offset capital gains with capital losses

Investment Optimization

  • Use indexation benefits for debt investments to reduce taxable gains
  • Reinvest property sale proceeds in residential property or specified bonds for tax exemptions
  • Plan your asset sales to stay within exemption limits each financial year
  • Diversify across asset classes to optimize tax efficiency

Important Notes & Compliance

  • Advance Tax Payment

    Advance tax payment is required if your total tax liability including capital gains tax exceeds ₹10,000. The advance tax should be paid by March 15th for the last quarter.

  • Transaction Costs

    STT (Securities Transaction Tax) and brokerage costs can be adjusted from the sale price when calculating capital gains, reducing your taxable amount.

  • Documentation

    Maintain proper documentation for all transactions including purchase receipts, sale contracts, and investment proofs for tax filing and potential audits.

  • Professional Advice

    Consult a qualified tax advisor or chartered accountant for complex scenarios, especially when dealing with multiple exemptions, reinvestment options, or cross-border transactions.

Capital Gains Tax Calculation Formulas

Understand the mathematical formulas used to calculate capital gains tax on investments.

Capital Gains = Sale Price - Purchase Price - Indexation

Example:

Sale ₹10L, Purchase ₹5L, Indexation ₹1L

10,00,000 - 5,00,000 - 1,00,000
= ₹4,00,000

Variables:

Sale Price - Price at which asset is sold
Purchase Price - Original purchase price
Indexation - Indexation benefit (for LTCG)

Tax = Capital Gains × Tax Rate

Example:

₹4L LTCG at 10% tax rate

4,00,000 × 0.10
= ₹40,000

Variables:

Capital Gains - Calculated capital gains amount
Tax Rate - 10% for LTCG, 15% for STCG

These formulas provide the mathematical foundation for the calculations. Actual results may vary based on rounding, compounding frequency, and specific lender policies.

Capital Gains Tax Calculator FAQs

Everything you need to know about capital gains tax, STCG, LTCG, and investment tax planning

How do you calculate capital gains tax?

To calculate capital gains tax: (1) Determine your cost basis (purchase price + expenses), (2) Compute your capital gain by subtracting cost basis from sale price and determine holding period, (3) Apply the correct tax rate - 20% for equity STCG, 12.5% for equity LTCG (with ₹1 lakh exemption), or use indexation for debt/property LTCG. Use our capital gains tax calculator for accurate calculations.

What is the difference between short-term and long-term capital gains?

Short-term capital gains (STCG) apply when you hold equity investments for less than 12 months (36 months for debt, 24 months for property). Long-term capital gains (LTCG) apply when you hold equity investments for 12 months or more (36 months or more for debt, 24 months or more for property). Long-term gains generally have lower tax rates and additional exemptions like ₹1 lakh for equity or indexation for debt/property.

How much amount of capital gain is tax free?

As per Section 112A of the Income Tax Act, long-term capital gains from equity investments (listed shares, equity mutual funds) are tax-free up to ₹1 lakh per financial year. Any LTCG above ₹1 lakh is taxed at 12.5%. Short-term capital gains have no exemption and are fully taxable at 20% for equity or as per income tax slab for debt/property.

What is the LTCG exemption limit for equity investments?

For equity investments held for more than 12 months, you get an annual exemption of ₹1 lakh on long-term capital gains. Any gains above ₹1 lakh are taxed at 12.5%. This exemption is available every financial year and applies to listed equity shares, equity-oriented mutual funds, and units of business trust held for 24+ months.

How is capital gains tax calculated on sale of property in India?

For property sales in India: (1) Calculate capital gain = Sale price - (Purchase price + improvement costs + expenses), (2) Determine holding period - STCG if less than 24 months (taxed as per income tax slab), LTCG if 24+ months (taxed at 20% with indexation), (3) Apply indexation to purchase price using CII for LTCG to reduce taxable gains. Use our property capital gains tax calculator for accurate calculations with indexation benefits.

How does indexation benefit work for debt investments?

Indexation adjusts your purchase price for inflation using the Cost Inflation Index (CII). This reduces your taxable capital gains. For debt investments, you can choose between 20% tax with indexation or 25% tax without indexation, whichever is lower.

What is the tax rate on short-term capital gains from equity?

Short-term capital gains from equity investments (held for less than 12 months) are taxed at 20%. This includes stocks, equity mutual funds, and ELSS funds sold before completing 12 months.

Do I need to pay advance tax on capital gains?

Yes, if your total tax liability including capital gains tax exceeds ₹10,000, you need to pay advance tax. The advance tax should be paid by March 15th for the last quarter. You can also pay the entire amount by March 31st.

Can I set off capital losses against capital gains?

Yes, you can set off capital losses against capital gains. Short-term capital losses can be set off against both short-term and long-term capital gains. However, long-term capital losses can only be set off against long-term capital gains. Losses can be carried forward for 8 years.

Are there any exemptions for long-term capital gains on property?

Yes, there are several exemptions for property sales like Section 54 (reinvestment in residential property), Section 54F (reinvestment for non-resident property), and Section 54EC (investment in specified bonds). These can help you save or defer capital gains tax.

How are capital gains from mutual funds taxed?

Equity mutual funds are taxed like equity shares - STCG at 20% (if held <12 months) and LTCG at 12.5% on gains above ₹1 lakh (if held ≥12 months). Debt mutual funds have STCG taxed at income tax slab rates and LTCG at 20% with indexation or 25% without indexation. Use indexation for debt funds as it typically results in lower tax liability.

How do you calculate taxes on capital gains?

Calculate taxes on capital gains in three steps: (1) Figure out your cost basis (purchase price + expenses), (2) Compute your gain or loss and holding period (STCG vs LTCG classification), (3) Apply the correct rate - 20% for equity STCG, 12.5% for equity LTCG (minus ₹1 lakh exemption), or use indexation (20%) vs non-indexation (25%) for debt/property LTCG. Our calculator automates this process.

What is capital gains tax calculator with indexation?

A capital gains calculator with indexation helps you calculate long-term capital gains tax on debt instruments and property by adjusting your purchase price for inflation using the Cost Inflation Index (CII). This reduces your taxable gains and typically results in lower tax (20% with indexation vs 25% without indexation). Indexation is beneficial for holdings of 36+ months (debt) or 24+ months (property).
Capital Gains Tax Calculator User Reviews and Ratings