Equity capital gains tax rules
| Type | Holding | Rate |
|---|---|---|
| Listed shares, equity MFs, equity ETFs — short term | 12 months or less | 20% |
| Same — long term | More than 12 months | 12.5% above ₹1.25 lakh a year |
| Debt mutual funds (bought from 1 April 2023) | Any | Slab rate |
These rates apply to transfers on or after 23 July 2024 and continue unchanged for FY 2026-27. Securities transaction tax must have been paid, and indexation is not available. Add 4% cess, and surcharge if total income exceeds ₹50 lakh (capped at 15% on these gains).
Basic exemption set-off
If your other income is below the basic exemption limit (₹4 lakh in the new regime), resident individuals can use the unused part to reduce taxable capital gains. The calculator applies it to short-term gains first because they carry the higher rate.
Set-off of losses
Short-term capital losses can be set off against both short- and long-term gains; long-term losses only against long-term gains. Unused losses carry forward for eight years if you file your return on time.
FAQ
What is the LTCG tax rate on shares in FY 2026-27?
12.5% on long-term gains above ₹1.25 lakh in a financial year, plus 4% cess. Shares must be held for more than 12 months.
What is the STCG tax rate on shares?
20% plus cess on gains from listed shares or equity mutual funds held for 12 months or less.
Can I get the 87A rebate on capital gains?
No. The section 87A rebate cannot be used against tax on short-term (111A) or long-term (112A) equity gains, though it still applies to your slab-rate income.