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/learn/capital-gains-equity-debtIndian Taxation & Capital GainsTax Rules5 min read
Capital Gains Tax Rules (STCG & LTCG) for Equity & Debt
The updated capital gains rules: 12.5% LTCG, 20% STCG for equity, and slab-rate taxation for debt.
Core Takeaways for Indian Investors
- ✓Equity Holding Period: Less than 12 months = Short-Term (STCG); 12 months or more = Long-Term (LTCG).
- ✓Equity STCG is taxed at a flat 20% (increased from 15%).
- ✓Equity LTCG is taxed at 12.5% (increased from 10%), with an increased annual exemption limit of ₹1.25 Lakhs per financial year.
- ✓Debt Mutual Funds bought on or after April 1, 2023 are taxed at your income tax slab rate regardless of holding period.
#1The Annual ₹1.25 Lakh Equity LTCG Tax Exemption Hack (Tax Loss/Gain Harvesting)
Every financial year, you get ₹1,25,000 in long-term equity capital gains completely tax-free!
Pro-tip: If you have unrealized long-term gains in a mutual fund or stock, you can sell units with up to ₹1.25 Lakh profit before March 31st and immediately reinvest the proceeds. This resets your purchase cost to the higher price without paying a single rupee in tax, saving you ₹15,625 in future tax every single year!
Interactive Simulator
FD vs Arbitrage Post-Tax Calculator
Compare real post-tax returns across 10%, 20%, and 30% tax brackets
Knowledge Check: Test Your Understanding
1 QuestionWhat is the annual tax-exempt threshold for Long-Term Capital Gains (LTCG) on equity investments in India?