Capital gains tax on property and equity after the July 2024 changes
Holding periods, the 12.5% long-term rate, the ₹1.25 lakh equity exemption, the end of indexation, the grandfathering option for old property and the exemptions that can bring the tax to zero.
4 min read · Published 2026-10-31 · Last reviewed 2026-10-31
The Finance (No. 2) Act, 2024 rewrote capital gains taxation from 23 July 2024: one long-term rate of 12.5% for almost everything, two holding periods instead of three, and the end of indexation. The Income-tax Act, 2025 carried these rules forward with new section numbers. This guide sets out what you pay when you sell shares, mutual funds, property or gold, and the legal ways to pay less.
Long-term or short-term
| Asset | Long-term if held more than |
|---|---|
| Listed shares, equity mutual funds, listed bonds, REITs, InvITs | 12 months |
| Everything else: property, gold, unlisted shares, debt funds (older units) | 24 months |
The 36-month period that used to apply to property and gold is gone.
Rates
| Gain | Rate |
|---|---|
| Long-term, listed equity and equity funds | 12.5% on gains above ₹1.25 lakh a year |
| Short-term, listed equity and equity funds | 20% |
| Long-term, property, gold, unlisted shares, other | 12.5%, no indexation |
| Short-term, property, gold, other | Your slab rate |
| Debt mutual funds bought on or after 1 April 2023 | Slab rate, whatever the holding period |
Add 4% cess to all of these, and surcharge if your total income exceeds ₹50 lakh. Securities transaction tax paid on equity trades is not deductible.
Equity: the ₹1.25 lakh exemption
The first ₹1.25 lakh of long-term equity gains in a financial year is exempt, across all your equity sales. Gains above that are taxed at 12.5%. Sell ₹5 lakh of shares bought for ₹2 lakh after 18 months: gain ₹3 lakh, taxable ₹1.75 lakh, tax ₹21,875 plus cess, ₹22,750 in total.
The exemption resets every April. Investors with large portfolios often sell and rebuy up to ₹1.25 lakh of gains each March to use it; the repurchase resets the cost and the holding period.
Shares bought before 1 February 2018 keep the "grandfathered" cost: the higher of actual cost and the price on 31 January 2018.
Property: indexation is gone, with one exception
Before July 2024, property sellers could inflate their purchase cost by the cost inflation index and pay 20% on the smaller indexed gain. Now the rate is 12.5% on the simple difference between sale price and cost. For properties that appreciated faster than inflation this is cheaper; for slow-growing properties it is dearer.
The exception: resident individuals and HUFs who bought property before 23 July 2024 may choose whichever is lower, 12.5% without indexation or 20% with indexation. Non-residents and companies cannot. Run both numbers before you file.
Cost of acquisition includes stamp duty, registration and brokerage paid at purchase. Cost of improvement includes structural additions with bills, not routine repairs. Transfer expenses such as brokerage and legal fees reduce the sale consideration. If you sell below the stamp duty value by more than 10%, the stamp duty value is treated as your sale price.
Bringing property gains to zero
- Section 54: reinvest the gain from a residential house into one (or, once in a lifetime, two) residential houses in India, bought within one year before or two years after the sale, or constructed within three years. Exemption is capped at ₹10 crore of gain.
- Section 54F: reinvest the entire sale proceeds of any non-house asset (plot, gold, shares) into one residential house, subject to owning not more than one other house.
- Section 54EC: invest up to ₹50 lakh of gain in NHAI, REC, PFC or IRFC bonds within six months; five-year lock-in, interest taxable.
- Capital Gains Account Scheme: if you have not bought the new house by the return filing date, park the gain in a CGAS account at a public sector bank to keep the exemption alive.
These section numbers refer to the 1961 Act and have been renumbered in the 2025 Act; the conditions are unchanged.
Gold, debt and the rest
Physical gold, gold ETFs and sovereign gold bonds sold on the exchange follow the 24-month, 12.5% rule (SGBs redeemed with RBI at maturity are exempt). Debt mutual funds bought after 31 March 2023 are taxed at slab rates always; older units get 12.5% after 24 months. Unlisted shares: 24 months, 12.5%. Cryptocurrency and other virtual digital assets: 30% flat, no deductions, no set-off.
Set-off and carry-forward
Short-term losses offset any capital gain; long-term losses offset only long-term gains. Unused losses carry forward eight years if you file on time. Capital losses never offset salary or business income.
Reporting
Capital gains go in Schedule CG of the return, with scrip-wise details for equity bought before 2018. The buyer's TDS on property (1% for residents) appears in your tax statement and is credited against the final tax.
Estimate the tax on any sale with the capital gains calculator, and if you are buying rather than selling, check what you must deduct with the property TDS calculator.
Sources
This guide is general information, not financial, tax or legal advice. Rules change; the review date above tells you when it was last checked. See our editorial policy.