LTCG Tax Calculator

Long Term Capital Gains (LTCG) tax applies to profits earned from the sale of equity shares and equity-oriented mutual funds held for more than 12 months. As per the Union Budget 2024 (effective from July 23, 2024), the LTCG tax rate on equity instruments has been increased from 10% to 12.5%, and the exemption limit has been raised from ₹1 lakh to ₹1.25 lakh per financial year. This means that long-term capital gains up to ₹1.25 lakh in a financial year are completely tax-free, and gains above this threshold are taxed at a flat 12.5% rate without indexation benefit. This applies under both the Old and New Tax Regimes as capital gains taxation is independent of the regime choice.

Section 112A of the Income Tax Act governs the taxation of long-term capital gains arising from the sale of equity shares, equity-oriented mutual funds, and business trusts. Introduced from FY 2018-19 (after the reintroduction of LTCG on equity), Section 112A mandates a flat 12.5% tax (revised from 10% in Budget 2024) on LTCG exceeding ₹1.25 lakh (revised from ₹1 lakh) per financial year. This section applies to transactions where Securities Transaction Tax (STT) has been paid on both acquisition and sale. The grandfathering provision under Section 112A protects gains made before February 1, 2018, from taxation by using the higher of the actual cost or the fair market value as on January 31, 2018.

The grandfathering provision under Section 112A protects investors from paying tax on notional gains that accrued before the LTCG tax was reintroduced on February 1, 2018. Under this provision, the cost of acquisition for equity shares/mutual funds held before January 31, 2018, is taken as the higher of: (1) the actual purchase price, or (2) the fair market value (FMV) as on January 31, 2018, or (3) the actual sale price (if lower than both). The FMV for listed shares is the highest quoted price on January 31, 2018, and for mutual funds, it is the NAV on that date. This ensures that gains accumulated before the tax was introduced are not taxed, and only gains after January 31, 2018, are subject to LTCG tax.

LTCG on real estate (property held for more than 24 months for assets acquired before July 23, 2024, or more than 12 months for assets acquired after that date) is taxed at 20% with the benefit of indexation under Section 48. The indexed cost of acquisition is calculated by multiplying the purchase price by the Cost Inflation Index (CII) of the year of sale divided by the CII of the year of purchase. However, Budget 2024 proposed to remove indexation for property sales and tax at 12.5% without indexation, but after public feedback, the government allowed taxpayers to choose between: (1) 20% tax with indexation (for properties bought before July 23, 2024), or (2) 12.5% tax without indexation. The LTCG Tax Calculator helps you compute the tax under both methods and choose the lower one.

The LTCG Tax Calculator computes your Long Term Capital Gains tax liability in a few simple steps. Enter the type of asset (equity shares, equity mutual funds, debt funds, real estate, or unlisted shares), purchase date and price, sale date and price, and any applicable FMV for grandfathering (for pre-2018 equity investments). The calculator automatically determines the holding period (long-term or short-term), applies the correct tax rate (12.5% for equity, 20% with indexation for property), computes the exemption limit (₹1.25 lakh for equity), calculates the grandfathering benefit if applicable, and shows the net tax payable including surcharge and cess. It also suggests tax-saving options like Section 54, 54EC, and 54F exemptions.

Several exemptions are available under the Income Tax Act to save LTCG tax: Section 54 — exemption on LTCG from sale of residential property by investing in another residential property (up to ₹10 crore reinvestment limit applies from FY 2023-24). Section 54EC — exemption by investing up to ₹50 lakh in specified bonds (NHAI, REC, PFC, IRFC) within 6 months of sale, with a 5-year lock-in. Section 54F — full exemption on LTCG from sale of any capital asset (except residential property) by investing the entire sale proceeds in a residential property. Section 54B — exemption on sale of agricultural land by investing in another agricultural land. These exemptions are available only under the Old Tax Regime and have specific conditions regarding timelines and holding periods.

The holding period for classifying capital gains as long-term varies by asset type. As per Budget 2024 (effective July 23, 2024): Equity shares, equity-oriented mutual funds, and listed securities — 12 months. Immovable property (real estate) — 24 months (for assets acquired before July 23, 2024) or 12 months (for assets acquired on or after July 23, 2024). Unlisted shares and non-equity mutual funds (debt funds) — 36 months (for assets acquired before July 23, 2024) or 24 months (for assets acquired on or after July 23, 2024). Gold and other assets — 24 months. If the asset is held for less than the specified period, the gains are classified as Short Term Capital Gains (STCG) and taxed at different rates.

Yes, surcharge is applicable on LTCG tax based on the total taxable income. The surcharge rates are: 10% if total income exceeds ₹50 lakh, 15% if it exceeds ₹1 crore, 25% if it exceeds ₹2 crore. However, for LTCG on equity shares and mutual funds under Section 112A, the maximum surcharge is capped at 15% (even if total income exceeds ₹2 crore). For LTCG on other assets (like property), the surcharge can go up to 25%. Additionally, a 4% Health and Education Cess is levied on the total tax plus surcharge. The LTCG Tax Calculator automatically computes the applicable surcharge and cess based on your total income and asset type.