Capital Gains Tax India 2025 — LTCG, STCG Rates on Shares, Property & Mutual Funds

Capital gains tax in India changed significantly with Budget 2024. Whether you're selling shares, mutual funds, property, or gold — the rates and rules have been overhauled. Here's the complete 2025 picture.

What are Capital Gains?

Profit from selling a capital asset (shares, property, mutual funds, gold, bonds) is a capital gain. Two types:

• Short-Term Capital Gain (STCG) — asset held for short duration before selling
• Long-Term Capital Gain (LTCG) — asset held longer, qualifies for lower/special tax rate

Capital Gains Tax Rates — 2025 (Post Budget 2024)

Equity LTCG — ₹1.25 Lakh Exemption

For listed equity shares and equity mutual funds, LTCG up to ₹1,25,000 per financial year is completely tax-free. Only gains above this threshold are taxed at 12.5%.

Grandfathering for Pre-January 31, 2018 Holdings

For equity purchased before January 31, 2018, cost of acquisition is deemed to be the higher of actual cost or market price on January 31, 2018. This protects gains accumulated before LTCG tax was introduced.

Property Capital Gains — Budget 2024 Change

Budget 2024 removed indexation benefit for property sold on or after July 23, 2024. The new rule:

• LTCG on property = 12.5% without indexation
• Old rule was 20% with indexation — for many long-held properties, the old rule was better
• For properties acquired before July 2001, cost is taken at fair market value on April 1, 2001

For properties held 10–15 years with high inflation, 20% with indexation often resulted in lower tax. With flat 12.5%, the math needs to be checked case by case.

Saving Capital Gains Tax — Exemptions

Section 54 — Property Sale

If you sell a residential property and reinvest the capital gains in another residential property within 2 years (or construct within 3 years), the gains are exempt. Conditions:

• Seller must be individual or HUF
• New property should be in India
• Can't sell new property within 3 years
• Capital Gains Account Scheme (CGAS) if property not purchased before ITR filing

Section 54F — Non-Property Asset Sale

Selling any long-term capital asset (other than property) and investing in one residential house — entire net consideration (not just gains) must be invested. Proportionate exemption if partial investment.

Section 54EC — Invest in Capital Gain Bonds

Invest LTCG (from land/building) in specified bonds (NHAI, REC) within 6 months of sale — up to ₹50 lakh exempt. Bonds have 5-year lock-in.

Debt Mutual Funds — No LTCG Rate

From April 1, 2023, debt mutual funds (those with less than 35% equity) are taxed at applicable slab rate regardless of holding period. The earlier 20% LTCG with indexation benefit was removed.

How to Report Capital Gains in ITR

• Use ITR-2 (for salary + capital gains) or ITR-3 (for business income too)
• Capital gains shown in Schedule CG in ITR
• LTCG from equity MF available in Form 26AS / AIS (reported by brokers and AMCs)
• Property capital gains: report sale price and purchase cost with registration documents