Capital Gains Tax Calculator

How capital gains tax works after July 2024

A capital gain is the profit when you sell a capital asset for more than you paid. India taxes that gain at a rate that depends on two things: what kind of asset it is, and how long you held it. The 23 July 2024 budget rewrote both halves of that table, so any older calculator or article you find is probably wrong now.

The holding period decides whether a gain is long-term or short-term. For listed equity shares and equity mutual funds the line is 12 months; cross it and the gain is long-term. For property, land, gold, unlisted shares and most other assets the line is 24 months. Sell before the line and the gain is short-term, taxed harder.

Equity and equity mutual funds

This is the most common case and the one the budget changed most visibly. Long-term gains (held over 12 months) are now taxed at 12.5%, up from 10%, but the annual exemption rose from ₹1 lakh to ₹1.25 lakh. So the first ₹1.25 lakh of long-term equity gains each financial year is tax-free, and only the excess is taxed at 12.5%. Short-term gains (12 months or less) jumped from 15% to 20%.

The ₹1.25 lakh exemption resets every financial year, which is the single most useful planning lever here. If you are sitting on a large unrealised gain, redeeming across two financial years shelters ₹2.5 lakh instead of ₹1.25 lakh. If you run regular SIPs, remember each installment is a separate purchase for the holding-period test, so a redemption pulls some units that are long-term and some that are not. The SIP calculator helps you see how the corpus builds before you plan the exit.

Property and the indexation choice

Property is where the July 2024 change is genuinely a trade-off. The long-term rate dropped to a flat 12.5%, but indexation, which used to inflate your purchase cost and shrink the taxable gain, was removed. For property and land bought before 23 July 2024 you get a one-time choice: pay 12.5% without indexation, or 20% with indexation, whichever gives the lower tax. For property bought on or after that date, only the flat 12.5% applies.

Which one wins depends on how long you held it and how much prices rose. For an asset held many years through high inflation, the indexed 20% route often still beats the flat 12.5%, because indexation can wipe out most of the nominal gain. For a recent purchase with modest appreciation, the flat 12.5% is usually lower. Enter your indexed purchase cost (purchase cost × CII of the sale year ÷ CII of the buy year) in the optional field above and the calculator will pay you the lower of the two. Property sold within 24 months is short-term and simply added to your income at slab.

Debt funds, gold and the rest

Debt mutual funds bought on or after 1 April 2023 are the harshest case: taxed at your slab rate on the entire gain under Section 50AA, no long-term concession, no indexation, regardless of holding period. This is why debt funds lost their tax advantage over fixed deposits; for a guaranteed-return comparison run the numbers through the FD calculator. Gold, unlisted shares and other assets held over 24 months are long-term at 12.5% without indexation; held less, they are short-term at slab.

Worked example

You bought listed shares for ₹5,00,000 and sold them 18 months later for ₹8,00,000. Holding is over 12 months, so this is long-term equity. The gain is ₹3,00,000. Subtract the ₹1.25 lakh exemption and ₹1,75,000 is taxable at 12.5%, giving ₹21,875 of tax. Your net gain after tax is ₹2,78,125.

Now suppose you sold the same shares after only 10 months. That is short-term equity, taxed at a flat 20% on the whole ₹3,00,000 with no exemption, so ₹60,000 of tax. The eight extra months of holding would have saved you ₹38,125. Holding-period timing around the 12-month line is the cheapest tax planning available on equity.

Common mistakes to avoid

The first is using pre-July-2024 rates. Plenty of calculators and blog posts still quote 10% LTCG and a ₹1 lakh exemption for equity, or assume indexation on property. Both are wrong for sales on or after 23 July 2024. Always check the date the rules apply to.

The second is forgetting that the ₹1.25 lakh exemption is only for listed equity and equity mutual funds. There is no such exemption for property, gold or debt. People sometimes assume the first ₹1.25 lakh of any capital gain is free; it is not.

The third is mishandling the property indexation choice. If you bought before 23 July 2024, you must actually compute both routes and pick the lower; the default flat 12.5% can cost you significantly more on a long-held property. And the fourth is ignoring loss set-off: short-term losses offset any gain, long-term losses only offset long-term gains, and filing late forfeits the carry-forward. Net your gains and losses across the year before you apply any single-transaction tax figure. Fold the final number into your overall liability with the income tax calculator.