Capital Gains Tax Calculator

Understanding Capital Gains Tax in India

When you sell a capital asset—such as stocks, mutual funds, real estate, or gold—for a price higher than what you paid for it, the profit you make is known as a "Capital Gain." The Income Tax Department taxes this profit, which is categorized into Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG).

The tax rates and the definitions of "short-term" vs "long-term" vary drastically depending on the type of asset you are selling.

1. Equity and Equity-Oriented Mutual Funds

For shares listed on recognized stock exchanges and mutual funds where at least 65% is invested in domestic equity:

Holding Period: Less than 12 months is Short-Term. 12 months or more is Long-Term.
STCG Tax Rate: Flat 15% (plus applicable surcharge and 4% cess).
LTCG Tax Rate: 10% on gains exceeding ₹1 Lakh in a financial year (plus cess). Note: No indexation benefit is allowed on equity LTCG.

2. Debt Mutual Funds

The taxation of debt mutual funds underwent a massive change recently. For debt funds bought after April 1, 2023, where equity exposure is less than 35%:

Holding Period: Irrelevant.
Tax Rate: All gains (regardless of how long you hold them) are considered Short-Term Capital Gains. They are added to your overall taxable income and taxed according to your applicable slab rate. The LTCG benefit and indexation benefit have been completely removed for new debt fund purchases.

3. Real Estate (Property)

Selling land or a house property triggers capital gains:

Holding Period: Less than 24 months is Short-Term. 24 months or more is Long-Term.
STCG Tax Rate: Added to your total income and taxed at your slab rate.
LTCG Tax Rate: Flat 20% with the benefit of Indexation.
What is Indexation? Indexation allows you to adjust the original purchase price of the property to account for inflation over the years you held it, using the Cost Inflation Index (CII) published by the government. This significantly reduces your taxable profit.

4. Gold and Physical Assets

Holding Period: Less than 36 months is Short-Term. 36 months or more is Long-Term.
STCG Tax Rate: Added to your total income and taxed at your slab rate.
LTCG Tax Rate: Flat 20% with indexation benefits.

5. Cryptocurrency and Virtual Digital Assets (VDAs)

India has introduced strict taxation on crypto:

Holding Period: Irrelevant. The concepts of short-term and long-term do not apply.
Tax Rate: Flat 30% tax on any profit made.
Rules: You cannot set off losses from one crypto asset against the profits of another. No deductions are allowed except the cost of acquisition. A 1% TDS is also applicable on transactions exceeding specific thresholds.

Setting Off Capital Losses

If you incur a loss on the sale of an asset, you can use it to reduce your tax burden:

Short-Term Capital Loss (STCL): Can be set off against both STCG and LTCG.
Long-Term Capital Loss (LTCL): Can only be set off against Long-Term Capital Gains (LTCG). It cannot be set off against STCG. If you cannot set off the entire loss in the current year, you can carry it forward for the next 8 assessment years, provided you file your Income Tax Return on time.

Formula

Income Tax Calculation Formula

Indian income tax uses progressive tax brackets:

Tax = Sum of (Income in bracket × Tax rate for bracket) - Deductions - Rebates

Tax Slab Calculation Steps

Determine gross income
Subtract deductions (80C, 80D, HRA, etc.)
Calculate taxable income
Apply applicable tax slabs
Add cess (if applicable): 4% on tax amount
Subtract applicable rebates/credits

TDS (Tax Deducted at Source)

TDS is advance tax deducted at the source of income:

TDS Amount = Gross Income × TDS Rate

TDS rates vary by income type:

Salary: 10-30% (depends on income)
Interest: 10% (banks deduct TDS on FD interest)
Dividends: 20%
Freelance income: 10-30%

Comparison & Examples

Income Tax Slabs (FY 2025-26) - Individuals Below 60 Years

Income Range	Tax Rate	Tax on ₹5,00,000 Income
₹0 - ₹3,00,000	Nil	₹0
₹3,00,001 - ₹7,50,000	5%	₹11,250
₹7,50,001 - ₹12,50,000	20%	N/A
₹12,50,001 - ₹20,00,000	30%	N/A
Above ₹20,00,000	45%	N/A

Tax Deduction Limits (Section 80C)

Deduction Type	Maximum Limit	Deductible Amount
Life Insurance Premium	₹1,50,000	₹50,000
PPF Contribution	₹1,50,000	₹1,50,000
ELSS Investment	₹1,50,000	₹1,50,000
Home Loan Principal	₹1,50,000	₹1,25,000
Tuition Fees	₹1,50,000	₹50,000
Total 80C Limit	₹1,50,000	₹1,50,000

Frequently Asked Questions

What is the difference between STCG and LTCG on equity?

Short-Term Capital Gains (STCG) apply when you sell listed equity shares or equity mutual funds within 12 months of purchase, taxed at a flat 20%. Long-Term Capital Gains (LTCG) apply when holding exceeds 12 months, and gains above ₹1.25 Lakhs per financial year are taxed at 12.5%.

Is the indexation benefit still available for property?

In the Budget 2024, the indexation benefit for property was removed, and the LTCG rate was lowered to 12.5%. However, a grandfathering clause was introduced: for properties purchased before July 23, 2024, taxpayers can choose to pay 12.5% without indexation OR 20% with indexation, whichever results in a lower tax liability.

Can I offset my capital losses against my salary income?

No, capital losses cannot be set off against salary income. Short-term capital losses (STCL) can be set off against both STCG and LTCG. However, long-term capital losses (LTCL) can only be set off against long-term capital gains (LTCG). Crypto losses cannot be set off against any gains at all.

What is the Section 54 exemption for property sales?

Section 54 allows you to completely exempt Long-Term Capital Gains (LTCG) arising from the sale of a residential property if you reinvest the gain amount in buying or constructing another residential property in India within specified timelines (buy within 1 year before or 2 years after, or construct within 3 years).

Is capital gains tax applicable on inherited property?

No tax is levied at the time of inheriting a property. However, when you eventually sell the inherited property, capital gains tax applies. The holding period and the cost of acquisition are calculated from the date the original owner (from whom you inherited it) purchased the property.

How are Mutual Fund SIPs taxed for capital gains?

Each Systematic Investment Plan (SIP) installment is treated as a separate, fresh investment. When you redeem units, the "First-In-First-Out" (FIFO) rule applies. The holding period for calculating STCG or LTCG is determined separately for every single unit based on its specific purchase date.

Related Calculators

EMI Calculator • Home Loan EMI • Education Loan EMI

Disclaimer

This calculator is provided for informational purposes only. It is not financial, investment, tax, or professional advice. Results are estimates based on the assumptions and inputs you provide. Always consult with a qualified financial advisor or tax professional before making any financial decisions. Past performance is not a guarantee of future results.

Sources & References

The figures, formulas, and guidance behind this Capital Gains Tax Calculator India draw on authoritative primary sources. For verification and further reading:

Frequently Asked Questions

What is the difference between Short-Term and Long-Term Capital Gains in India?

The classification depends on how long you held the asset. For listed equity shares and equity mutual funds, gains from holdings of up to 12 months are Short-Term Capital Gains (STCG); beyond 12 months, they are Long-Term Capital Gains (LTCG). For real estate and physical gold, the holding period threshold is different. Each category is taxed at separate rates — enter your asset type and holding period into the calculator and it applies the correct classification automatically.

How does this calculator determine the tax on my capital gain?

Enter the asset type (equity, debt fund, real estate, gold, etc.), the purchase price, sale price, holding period, and any applicable indexed cost (for LTCG on eligible assets). The calculator identifies whether the gain is STCG or LTCG, applies the rate set by the Income Tax Act for that asset category, and shows the tax payable — without you needing to look up the current rules manually.

What is the Indexation Benefit and when does it apply?

Indexation allows you to inflate the original purchase price using the Cost Inflation Index (CII) published by the government, effectively reducing the taxable gain by accounting for inflation over the holding period. This benefit has historically applied to certain Long-Term Capital Gains (such as on debt funds or real estate), but applicability rules have changed over recent budget cycles — the calculator reflects the current rules in force.

Is there any exemption on Long-Term Capital Gains from equity?

Yes — there is a threshold below which LTCG from listed equity shares and equity-oriented mutual funds is exempt from tax in a financial year. Gains above that threshold are taxed at the applicable LTCG rate. The calculator accounts for this exemption automatically when you enter equity as the asset type, so you see only the net taxable amount.

Can I reduce my capital gains tax by reinvesting the proceeds?

Yes, certain sections of the Income Tax Act allow exemption from LTCG if you reinvest the proceeds into specified assets within prescribed time limits — for example, reinvesting real estate gains into another residential property or into specified bonds. These exemptions have conditions and monetary caps. This calculator focuses on computing the raw tax liability; consult a tax advisor to evaluate whether a reinvestment exemption applies to your specific situation.

Capital Gains Tax Calculator — Free (2026)