Two things decide your capital gains tax: what you sold, and how long you held it. Nothing else. The table below is the whole rule set for individuals, as of 17 August 2026, for the financial year 2026-27. Read it as a pair of columns — find your asset, check the holding period, then take the rate on that row. The most common error is reading the rate without the period above it.
Surcharge and cess sit on top of every rate here. They are not in the table.
Capital gains tax rates by asset class
| Asset | Long term after | Short-term rate | Long-term rate | Indexation |
|---|---|---|---|---|
| Listed equity shares and equity mutual funds | 12 months | 20% | 12.5% above ₹1,25,000 a year | No |
| Immovable property | 24 months | Slab rate | 12.5% without indexation (20% with indexation optional for purchases before 23 July 2024) | Optional, legacy only |
| Gold, jewellery, unlisted shares | 24 months | Slab rate | 12.5% | No |
| Debt mutual funds bought on or after 1 April 2023 | Not applicable | Slab rate | Slab rate | No |
| Sovereign Gold Bonds held to maturity | 8 years | Slab rate | Fully exempt at maturity | Not applicable |
| Virtual digital assets (crypto) | Not applicable | 30% flat | 30% flat | No — and no loss set-off |
Source: credsir tax reference data, as of 17 August 2026, for FY 2026-27 (assessment year 2027-28).
How to read this table without getting it wrong
Five misreadings account for most of the mistakes we see.
The ₹1,25,000 is a yearly limit, not a per-sale one. It applies once, across all your long-term equity and equity fund gains in a financial year. Sell three funds and you still get one exemption, not three.
The 20% short-term rate is flat. It is not your slab rate. A person in the 5% band pays 20% on a short-term equity gain. A person in the 30% band pays the same 20%.
Debt funds have no long-term rate at all. If you bought on or after 1 April 2023, the gain is taxed at your slab rate however long you hold. There is no reward for waiting. That is the single biggest change of the last few years.
Indexation is nearly gone. It survives only as an option on property bought before 23 July 2024. For gold, unlisted shares and everything else, the flat 12.5% is the rate and inflation is not adjusted for.
A Sovereign Gold Bond is only exempt at maturity. Hold the full eight years and the capital gain is free of tax. Sell on the stock exchange before then and it is not. See sovereign gold bonds.
What gets added on top of the rate
Health and education cess of 4% applies to the tax. Surcharge applies if your total income crosses ₹50 lakh: 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore and 37% above ₹5 crore. The higher surcharge rates do not apply to every kind of income, so check the position for your own return before you compute.
Securities transaction tax is separate again. It is charged on the trade, not the gain, and you pay it whether you make money or lose it. The Union Budget 2026-27 raised it: STT on futures goes to 0.05% from 0.02%, and on options premium and exercise to 0.15% from 0.1% and 0.125% respectively.
What changed in 2026
Two things a seller should know. First, the Income Tax Act, 2025 came into effect from 1 April 2026, replacing the 1961 Act. Section numbers have changed. Any older article or advice quoting a section of the 1961 Act may point at nothing now, even where the underlying rule is unchanged. Check the section against the current Act before you rely on it.
Second, share buybacks are being taxed as capital gains for all types of shareholders, per the Union Budget 2026-27. Promoters pay an additional buyback tax on top. The Budget put the effective rate at 22% for corporate promoters and 30% for non-corporate promoters. For an ordinary retail shareholder tendering shares, a buyback now falls into the capital gains rules above.
When does the holding period start and stop?
It runs from the date you acquired the asset to the date you transferred it. For shares that is the trade date, not the settlement date. For property it is generally the date of registration of your purchase to the date of the sale deed.
Inherited and gifted assets are the exception worth knowing. You inherit the previous owner’s holding period and their cost. A flat your father bought in 1998 does not restart its clock the day it comes to you. That single rule decides whether a sale is short term or long term, and it is missed constantly. Our page on capital gains on property works through it.
Can you avoid the tax legally?
Sometimes, and only through the exemptions the Act names. Reinvesting a property gain in another house, or in specified bonds, can defer or remove the liability if you meet the conditions and the deadlines. There is no general “reinvest and pay nothing” rule for shares.
The routine, legal option for equity is timing. Long-term equity gains up to ₹1,25,000 a year are outside the tax. Booking gains up to that limit each year, rather than in one large sale later, uses an exemption you would otherwise waste. Our capital gains exemptions page lists the statutory routes, and the capital gains calculator runs the arithmetic.
Frequently asked questions
What is the LTCG tax on shares in 2026?
Long-term gains on listed shares and equity funds are taxed at 12.5%, on the amount above ₹1,25,000 in a financial year. The holding period to qualify is 12 months. Below 12 months the gain is short term and taxed at 20%. See LTCG on shares.
Do I pay tax if I do not withdraw the money from my broker?
Yes. The tax is triggered by the sale, not by moving cash to your bank. Selling a fund and buying another on the same day is still a taxable transfer. Only a switch inside a single scheme’s plan may escape it, and that depends on the scheme.
Can I set off a capital loss against my salary?
No. A capital loss can only be set off against a capital gain. A short-term loss can offset either kind of gain. A long-term loss can offset only a long-term gain. Crypto losses cannot be set off against anything.
Is indexation benefit still available?
Only in one place. Property bought before 23 July 2024 may be taxed at 20% with indexation, as an option against 12.5% without it. For every other asset in the table, indexation is gone.
How is gold taxed when I sell it?
Physical gold and jewellery become long term after 24 months, then attract 12.5%. Sold sooner, the gain is added to your income and taxed at your slab rate. A Sovereign Gold Bond held to its eight-year maturity is exempt instead. The way you hold gold changes the tax more than the price does.
Sources
- credsir tax reference data, FY 2026-27, as of 17 August 2026, sourced to incometax.gov.in.
- Press Information Bureau, direct tax proposals, Union Budget 2026-27, 1 February 2026 — pib.gov.in. Fetched 7 September 2026.
Related reading
Advance Tax
Who owes advance tax, the four instalment dates, and the interest under the renumbered Sections 424 and 425 if you miss them.
7 Sep 2026 · 6 min
All Income Tax Deductions
Every deduction with its limit and its regime — and why almost none of them applies under the default new regime.
7 Sep 2026 · 5 min
Capital Gains Exemptions
The rollover sections CBDT names, what each covers, and the deadline that costs people the exemption.
7 Sep 2026 · 8 min