Capital Gains Tax 2026 - LTCG 12.5% / STCG 20% New Rates Stocks + Mutual Funds Guide

Capital Gains Tax 2026 - LTCG 12.5% / STCG 20% Complete Guide

Bhaiyon, Capital Gains Tax stocks + mutual funds + real estate sale par lagta hai - 2 categories: LTCG (Long Term) aur STCG (Short Term). Budget 2024 (effective 23 July 2024) ne rates increase kiye - STCG 15% se 20% + LTCG 10% se 12.5% ho gaya for equity. Plus LTCG exemption Rs 1 lakh se Rs 1.25 lakh/year kiya. 2026 me same rates continue hain - Budget 2026 me koi change nahi. Section 111A (STCG) + Section 112A (LTCG) under Income Tax Act apply hote hain. Both regimes (old + new) me capital gains rate same - regime change se kuch farak nahi padta. Real estate + debt MF different rules - 24 months holding + STCG slab rate pe (NOT 20%). Ye guide complete LTCG/STCG rates + holding period + indexation removal + Section 87A applicability + ITR claim degi.

Big change 2024: Pre-23 July 2024 sales = old rates (15%/10%). Post-23 July 2024 = new rates (20%/12.5%). FY 2025-26 me all gains at new rates.

Capital Gains Tax 2026 - Quick Info

Equity Stocks + Mutual Funds Capital Gains

LTCG (Long Term) - Section 112A

• Holding ≥ 12 months (1+ year)
• Tax Rate: 12.5% flat (was 10% pre-23 July 2024)
• Exemption: Rs 1,25,000/year (was Rs 1L)
• Applies to: Listed equity shares + Equity MF (>65% equity) + Business trust units
• STT (Securities Transaction Tax) must be paid
• NO indexation allowed for equity LTCG

STCG (Short Term) - Section 111A

• Holding < 12 months (less than 1 year)
• Tax Rate: 20% flat (was 15% pre-23 July 2024)
• Applies to: Same equity shares + MF + business trust units (with STT)
• NO Section 87A rebate - 20% direct on entire STCG amount

Section 87A rebate Rs 60K does NOT apply to STCG/LTCG (Budget 2025 clarification). Income tax slab impact only.

Real Estate + Debt + Other Assets

Real Estate (Land/Property)

• Holding < 24 months: STCG at slab rate (per income bracket)
• Holding ≥ 24 months: LTCG at 12.5% (without indexation) OR 20% (with indexation) - taxpayer's choice for property bought before 23 July 2024
• Property purchased AFTER 23 July 2024: Only 12.5% without indexation

Debt Mutual Funds (Acquired After 1 April 2023)

• All gains at slab rate (no LTCG benefit) - Budget 2023 change
• Treated as STCG regardless of holding period

Gold + Bonds + Unlisted Shares

• Holding < 24 months: STCG at slab rate
• Holding ≥ 24 months: LTCG at 12.5% (without indexation)
• Sovereign Gold Bonds (held to maturity): Tax-free (no capital gains)

Capital Gains Calculation Examples

Example 1 (Equity LTCG): Bought Rs 2.5L Reliance shares Jan 2024, sold Rs 3.5L Mar 2026 (26 months). LTCG Rs 1L → within Rs 1.25L exemption = Tax Rs 0.

Example 2 (Equity STCG MF): Bought equity MF Rs 5L Aug 2025, sold Rs 5.8L Apr 2026 (8 months). STCG Rs 80K × 20% = Rs 16,000 tax + 4% cess.

STCG independent of regular income tax - even if salary below taxable limit, STCG still taxable (no Section 87A rebate).

Example 3 (Property LTCG): Flat bought 2018 Rs 50L, sold 2026 Rs 90L.

• Without indexation: LTCG Rs 40L × 12.5% = Rs 5,00,000 tax
• With indexation (pre-July 2024): Indexed cost ~Rs 70L, LTCG Rs 20L × 20% = Rs 4,00,000 tax
• Choose lower. Post-July 2024 purchases = ONLY without indexation.

Grandfathering Clause (Pre-31 January 2018 Shares)

CRITICAL for old equity holdings - if you bought shares/MF before 31 January 2018, special "grandfathering" rule:

• Cost of Acquisition = HIGHER of:
  • Actual purchase price, OR
  • Fair Market Value (FMV) on 31 January 2018
• This protects gains accrued before Section 112A introduction
• Effectively, only post-31 Jan 2018 appreciation is taxable as LTCG

Example: Bought TCS @ Rs 1,500 in 2015. FMV on 31 Jan 2018 = Rs 3,000. Sold 2026 @ Rs 4,000.

• Cost = Rs 3,000 (grandfathered FMV) → LTCG = Rs 1,000/share (NOT Rs 2,500)
• Rs 1,500 of accrued gain = TAX-FREE

Bonus/Rights shares acquired before 31 Jan 2018: Same grandfathering applies - HUGE benefit for long-term investors.

Capital Loss Set-Off + Carry Forward

• Cannot set off capital loss against salary/business income
• Filing ITR mandatory to carry forward losses (even if no other tax liability)
• Track via Schedule CFL in ITR-2

Holding Period Quick Reference

How to Claim/Pay Capital Gains in ITR

1. ITR Form: ITR-2 (capital gains required) - NOT ITR-1
2. Schedule CG (Capital Gains) fill karo:
   • Section A: STCG details
   • Section B: LTCG details
3. Sub-categories: 111A (equity STCG), 112A (equity LTCG), other CG
4. Statement of Capital Gains Schedule fill karo (asset-wise)
5. Tax payable auto-calculate hota hai (20%/12.5%)
6. Filing deadline: 31 July 2026 (FY 2025-26)
7. Late filing penalty: Rs 5,000 + interest under Section 234A

Capital Gains Tax 2026 FAQs

Q: LTCG rate 2026 me kya hai equity ka? A: 12.5% flat (Section 112A) - was 10% before 23 July 2024. Plus Rs 1,25,000/year exemption (was Rs 1L). 2026 me same rates continue, koi Budget 2026 change nahi.

Q: STCG 20% me Section 87A rebate milega? A: NAHI - Budget 2025 clarification ke baad Section 87A rebate Rs 60K STCG/LTCG par NOT applicable. STCG 20% direct full amount pe lagta hai, regular income slab se separate.

Q: Equity MF kitne saal hold karu LTCG ke liye? A: 12 months minimum (1 year). 12 month complete hone ke baad sell = 12.5% LTCG rate. Pehle (>= 65% equity) MF same rule. Hybrid funds (35-65% equity) different rules.

Q: Property sale me indexation milega? A: Sirf July 2024 se pehle bought property ke liye taxpayer choice: 12.5% without indexation OR 20% with indexation. Post-July 2024 purchases = ONLY 12.5% without indexation.

Q: Debt mutual fund LTCG kya rate hai? A: April 2023 ke baad bought debt MF par LTCG benefit NAHI - all gains at slab rate. Pehle bought (April 2023 se pehle) = LTCG 12.5% with indexation possible.

Q: ITR-1 file kar sakta hu agar capital gains hai? A: NAHI - ITR-1 (Sahaj) capital gains support nahi karta. ITR-2 mandatory hai if any STCG/LTCG. Schedule CG fill karna padega.

Q: Loss capital gains ka kya hota? A: STCL (Short term loss) = STCG/LTCG dono se set off + 8 years carry forward. LTCL (Long term loss) = ONLY LTCG se set off + 8 years carry forward. Salary income se set-off allowed nahi.

Related Tax + Investment Guides

• Income Tax Slab Rates 2026 (FY 2025-26) - Rs 12L tax-free new regime
• Section 80C Tax Saving Guide 2026 - ELSS for tax saving + LTCG
• ELSS Top Tax Saver Mutual Funds 2026 - 3-year lock-in + 80C eligible
• NPS vs PPF vs ELSS Comparison - Tax saver decision
• ITR Filing Guide 2026 - Schedule CG + filing
• Standard Deduction 2026 - Rs 75K salaried
• New vs Old Tax Regime - Both regime CG same
• Best FD Rates April 2026 - FD vs equity comparison
• SIP / Mutual Fund Kaise Shuru Kare 2026 - Beginner guide: SIP start, direct plan, fund types
• Demat Account Kaise Khole 2026 - Stocks/ETF ke liye demat - online process, charges, broker
• Share Market Kaise Sikhe 2026 - Beginner Guide - Stock investing basics + risk (beginners)
• IPO Kaise Apply Kare - naye share ka rasta

Source: Income Tax Department + CBDT Press Release Budget 2024 + ClearTax + Bajaj Finserv + Finance Bill 2026 + PIB cross-verified. Effective dates 23 July 2024 + April 2023 (debt MF) confirmed. Verified 2 May 2026.