Capital gains arise when you sell a capital asset — stocks, mutual funds, property, gold, or bonds — at a profit. The tax treatment differs based on the asset type and holding period. Budget 2024 brought significant changes that are effective from July 23, 2024.
Short-Term vs Long-Term Capital Gains
For listed equity shares and equity mutual funds: STCG (held less than 12 months) is taxed at 20% (revised from 15% in Budget 2024). LTCG (held 12+ months) above ₹1.25 lakh is taxed at 12.5% without indexation benefit (revised from 10% above ₹1 lakh).
Capital Gains on Property
Property sold after 24 months is Long-Term. Post Budget 2024, LTCG on property is taxed at 12.5% without indexation (changed from 20% with indexation). For property acquired before July 23, 2024, taxpayers may choose whichever computation gives lower tax.
Exemptions Under Sections 54 and 54EC
LTCG on residential property can be exempted by reinvesting in another residential property (Section 54) or in specified bonds like NHAI or REC (Section 54EC, up to ₹50 lakh). Time limits apply. Proper planning before the sale date is essential to maximise exemptions.
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