Capital Gains Tax in India: Rates & Rules (2026)
Quick Answer
Short-Term Capital Gains (STCG) on equity are typically taxed at 20%, while Long-Term Capital Gains (LTCG) above ₹1.25 lakh are taxed at 12.5%. Non-equity mutual funds are taxed at your applicable slab rate regardless of the holding period.
What are Capital Gains?
Any profit or gain that arises from the sale of a ‘capital asset’ is a capital gain. This gain is considered ‘income’ and is thus taxable in the year the asset was sold. Capital assets include stocks, mutual funds, real estate, gold, and bonds.
Taxation depends on the holding period, which determines if the gain is Short-Term (STCG) or Long-Term (LTCG).
Equity and Mutual Fund Taxation (2026)
For listed equity shares and equity-oriented mutual funds:
- STCG (Held < 12 months): Taxed at a flat rate of 20%.
- LTCG (Held > 12 months): Taxed at 12.5% on gains exceeding ₹1.25 lakh in a financial year.
For debt-oriented mutual funds and other non-equity assets, the gains are typically added to your total income and taxed at your slab rate (no indexation benefits are available for most debt funds since April 2023).
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