Capital Gains Tax in India 2026 — The Complete Guide
Budget 2024 rewrote India's capital gains rules with effect from 23 July 2024, and 2026 is the first full year everyone files under them. The changes are large: equity long-term gains jumped from 10% to 12.5% (with the exemption raised from ₹1 lakh to ₹1.25 lakh), equity short-term gains rose from 15% to 20%, holding periods were collapsed into just two buckets, and — the biggest shock for property owners — indexation was abolished in favour of a flat 12.5% rate, softened only by a grandfathering option for older assets. This calculator applies the exact post-Budget-2024 logic, including the indexation choice most tools silently drop.
The Two Holding-Period Buckets
| Asset | Long-term if held | LTCG rate (2026) | STCG rate (2026) |
|---|---|---|---|
| Listed equity & equity MF (STT paid) | > 12 months | 12.5% above ₹1.25L | 20% |
| Property / land / building | > 24 months | 12.5% (no indexation)* | Slab rate |
| Gold, jewellery, unlisted shares | > 24 months | 12.5% (no indexation) | Slab rate |
| Debt MF (bought on/after 1 Apr 2023) | — | Slab rate (no LT benefit) | Slab rate |
*Grandfathering: property/land acquired before 23 July 2024 may instead use 20% with indexation if that is lower (resident individuals/HUF only).
How Capital Gains Tax Is Calculated
Tax = (Sale − Cost − Exemption) × Rate × (1 + 4% cess)
- Equity LTCG: tax = (gain − ₹1,25,000) × 12.5%. Only the gain above the exemption is taxed; the exemption resets each financial year.
- Equity STCG: tax = gain × 20% (no ₹1.25L exemption on short-term gains).
- Property/gold LTCG (post-cutoff): tax = gain × 12.5%, with no indexation.
- Property LTCG (pre-cutoff): lower of [gain × 12.5%] and [(sale − indexed cost) × 20%].
- Short-term property/gold & all debt-fund gains: added to income, taxed at your slab.
Cost Inflation Index (CII) — Used for the Indexation Option
Indexed cost = original cost × (CII of sale year ÷ CII of purchase year). The CBDT notifies the CII each year, base year 2001-02 = 100. It only matters for the grandfathered 20% computation on pre-23-July-2024 property and gold.
| Financial year | CII | Financial year | CII |
|---|---|---|---|
| 2015-16 | 254 | 2021-22 | 317 |
| 2016-17 | 264 | 2022-23 | 331 |
| 2017-18 | 272 | 2023-24 | 348 |
| 2018-19 | 280 | 2024-25 | 363 |
| 2019-20 | 289 | 2025-26 | 376 |
| 2020-21 | 301 | 2026-27 | pending notification |
What Changed in Budget 2024
| Item | Before 23 Jul 2024 | After 23 Jul 2024 |
|---|---|---|
| Equity LTCG rate | 10% | 12.5% |
| Equity LTCG exemption | ₹1,00,000 | ₹1,25,000 |
| Equity STCG rate | 15% | 20% |
| Property/gold LTCG | 20% with indexation | 12.5% without indexation* |
| Holding period (other assets) | 24 or 36 months | 24 months (unified) |
| Holding period (listed) | 12 months | 12 months (unchanged) |
*Pre-23-July-2024 property/land retains the option of 20%-with-indexation if lower, for resident individuals/HUF.
Common Capital Gains Mistakes to Avoid
- Forgetting the grandfathering choice. On older property, always compare 12.5%-no-index against 20%-with-index and claim the lower.
- Applying the ₹1.25L exemption to property or gold. It is an equity-only exemption.
- Using the old 10% / 15% equity rates. Sales on or after 23 July 2024 use 12.5% / 20%.
- Expecting indexation on new debt funds. Debt MF bought on/after 1 April 2023 is taxed at slab, full stop.
- Ignoring the 4% cess. Effective LTCG is 13%, not 12.5%, once cess is added.
- Missing the holding-period cutoff by days. 12 months for listed, 24 for the rest — a few days short flips you to higher short-term rates.
Frequently Asked Questions
What is the LTCG tax rate in India in 2026?
A flat 12.5% on most assets after Budget 2024. Equity LTCG is 12.5% above a ₹1.25 lakh exemption; property and gold are 12.5% without indexation. Add 4% cess on the tax.
Is indexation gone for property?
For property bought on/after 23 July 2024, yes. For property bought before that date, a resident individual/HUF can still opt for 20% with indexation if it works out lower than 12.5% without.
What is the short-term capital gains rate on shares?
20% for listed equity and equity mutual funds sold within 12 months (up from 15%). For other assets, short-term gains are taxed at your slab rate.
Does the ₹1.25 lakh exemption apply to all gains?
No — only to long-term gains from listed equity shares and equity mutual funds. Property, gold, debt funds and short-term gains get no such exemption.
How are debt mutual funds taxed now?
Units bought on or after 1 April 2023 are always taxed at your slab rate with no indexation, regardless of how long you hold them.
Is there a surcharge on capital gains?
High-income taxpayers may face a surcharge, but the surcharge on most capital gains is capped at 15%. The 4% health-and-education cess applies on top of tax plus any surcharge.