Capital Gains Tax After Budget 2026: LTCG & STCG
Budget 2026 carried forward the capital gains tax framework established in July 2024. This guide covers the current LTCG and STCG rates for equity, debt, property, and gold — with worked examples and the key changes from the past two years.
Last updated: 7 February 2026, 5:00 PM IST
Capital gains taxation in India underwent a significant overhaul in July 2024 when the government restructured rates for equity, property, and other assets. Budget 2026 did not introduce further changes to capital gains rates, which means the July 2024 framework continues to apply for FY 2026-27. For a detailed breakdown of property-specific capital gains, see our capital gains property guide.
This article consolidates all current capital gains tax rates across asset classes — equity, debt, property, gold, and international funds — with worked examples. Use the Capital Gains Property Calculator to compute your exact tax liability on a property sale.
Data Sources
- Finance Act 2024 — Capital Gains Amendments (July 2024) — incometaxindia.gov.in
- Finance Bill 2026 — No Capital Gains Changes (1 Feb 2026) — www.indiabudget.gov.in
- SEBI Circular on Mutual Fund Taxation (FY 2025-26) — www.sebi.gov.in
- CBDT Notification on Property LTCG (Aug 2024) — www.cbdt.gov.in
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Capital Gains Tax Rates: Complete Table
| Asset Class | Holding Period for LTCG | LTCG Rate | STCG Rate |
|---|---|---|---|
| Listed equity shares | >12 months | 12.5% (above ₹1.25L) | 20% |
| Equity mutual funds | >12 months | 12.5% (above ₹1.25L) | 20% |
| Debt mutual funds | N/A (no LTCG benefit) | Slab rate | Slab rate |
| Property (post-Jul 2024) | >24 months | 12.5% (no indexation) | Slab rate |
| Property (pre-Jul 2024) | >24 months | Lower of: 12.5% or 20% with indexation | Slab rate |
| Gold / gold ETFs | >24 months | 12.5% | Slab rate |
| International equity funds | N/A (no LTCG benefit) | Slab rate | Slab rate |
Equity LTCG: 12.5% Above ₹1.25 Lakh
Long-term capital gains on listed equity shares and equity-oriented mutual funds (holding period exceeding 12 months) are taxed at 12.5% for gains exceeding ₹1.25 lakh in a financial year. This threshold was increased from ₹1 lakh to ₹1.25 lakh in the July 2024 amendments.
Worked Example: Equity LTCG
Suppose you bought equity mutual fund units worth ₹10 lakh in January 2025 and sold them in March 2026 for ₹13.5 lakh:
- Purchase price: ₹10,00,000
- Sale price: ₹13,50,000
- Capital gain: ₹3,50,000
- Exemption: ₹1,25,000
- Taxable LTCG: ₹2,25,000
- Tax at 12.5%: ₹28,125
- Cess at 4%: ₹1,125
- Total tax: ₹29,250
Equity STCG: 20% Flat
Short-term capital gains on listed equity and equity mutual funds (holding period of 12 months or less) are taxed at a flat rate of 20%. This was increased from 15% in July 2024. The increase makes short-term trading relatively more expensive from a tax perspective.
Impact on Traders and SIP Investors
Active traders face a higher tax burden with the 20% STCG rate. For SIP investors, units held for less than 12 months are sold on a first-in-first-out (FIFO) basis. Partial redemptions may trigger STCG on recent SIP instalments while generating LTCG on older ones. Plan redemptions carefully to minimise STCG exposure.
Property Capital Gains: The Indexation Question
Property capital gains taxation was significantly changed in July 2024. The rules now depend on when you acquired the property:
Property Acquired After 23 July 2024
LTCG (holding period exceeding 24 months) is taxed at a flat 12.5% without indexation. The purchase price is not adjusted for inflation. This simplifies calculation but may result in higher tax for properties held for many years where inflation has been significant.
Property Acquired Before 23 July 2024
You have a choice: compute your tax both ways and pay the lower amount:
- Option A: 12.5% on actual gain (sale price minus original purchase price) — no indexation
- Option B: 20% on indexed gain (sale price minus inflation-adjusted purchase price using CII)
For properties held for 10+ years with significant appreciation, Option B (20% with indexation) often results in lower tax because the indexed cost of acquisition is much higher. Use our Capital Gains Property Calculator to compare both options instantly.
Debt, Gold, and International Funds
Debt Mutual Funds
Since the Finance Act 2023, gains from debt mutual funds (less than 65% equity allocation) are taxed at your income tax slab rate regardless of how long you hold them. There is no LTCG benefit. This applies to liquid funds, ultra-short-term funds, corporate bond funds, gilt funds, and all other debt-oriented categories.
Gold and Gold ETFs
Physical gold, gold ETFs, and gold mutual funds qualify for LTCG treatment after 24 months of holding. LTCG is taxed at 12.5% (previously 20% with indexation). STCG is taxed at your slab rate.
International Equity Funds
Funds investing more than 65% in international equities are treated like debt funds for tax purposes — gains are taxed at your slab rate regardless of holding period. This includes popular US equity index funds and Nasdaq feeder funds.
Section 54 and 54F: Capital Gains Exemptions on Property
If you sell a residential property and reinvest the proceeds in another residential property, you can claim exemption under Section 54 (for residential property sale) or Section 54F (for non-residential asset sale). Key conditions:
- The new property must be purchased within 2 years (or constructed within 3 years) of the sale.
- The exemption is limited to one residential property in India.
- If the new property is sold within 3 years, the exemption is reversed.
- Alternatively, you can deposit the capital gains in a Capital Gains Account Scheme (CGAS) before the ITR filing deadline and use the funds within the prescribed period.
Founding Partner, Tykhe Ventures · Founder, Kompella Technologies
Founding Partner at Tykhe Ventures ($20M AUM, early-stage investing) and Founder of Kompella Technologies, which provides fractional CTO/CPO services to funded startups. NISM XIX-C certified. Built RupayWise because the financial tools available in India were either oversimplified or designed to sell you a product — not help you decide.
This guide is for informational and educational purposes only. While we strive for accuracy, tax laws, interest rates, and financial regulations change frequently. Always verify current rates and rules with official government sources before making decisions. RupayWise (Kompella Tech Pvt. Ltd.) is not liable for any decisions made based on information provided on this site.
Frequently Asked Questions
What is the LTCG tax rate on equity mutual funds and stocks after Budget 2026?
LTCG on listed equity shares and equity-oriented mutual funds is taxed at 12.5% for gains exceeding ₹1.25 lakh in a financial year. The holding period for long-term classification is 12 months. Gains up to ₹1.25 lakh are tax-free. This rate was set in July 2024 and Budget 2026 made no changes.
What is the STCG rate on stocks and equity mutual funds?
Short-term capital gains (holding period less than 12 months) on listed equity and equity-oriented mutual funds are taxed at a flat rate of 20%. This was increased from 15% in the July 2024 budget amendments.
How is property capital gains taxed after Budget 2026?
For property acquired after 23 July 2024, LTCG (holding >24 months) is taxed at 12.5% without indexation. For property acquired before 23 July 2024, you can choose: either 12.5% without indexation, or 20% with indexation — whichever gives lower tax. STCG on property (holding ≤24 months) is taxed at your income tax slab rate.
Is indexation benefit still available for property LTCG?
Only for properties acquired before 23 July 2024. Taxpayers selling such properties can compute tax both ways (12.5% without indexation or 20% with indexation) and choose the lower amount. For properties acquired on or after 23 July 2024, indexation is not available — the flat 12.5% rate applies.
How are debt mutual fund gains taxed now?
Gains from debt mutual funds (less than 65% equity allocation) are taxed at your income tax slab rate regardless of holding period. There is no LTCG benefit for debt funds — this change was made in the Finance Act 2023 and continues to apply.
Related Resources
Guides
- Capital Gains Guide — Calculate LTCG and STCG on property sale in India. Old regime vs new regime comparison with Section 54 and 54EC exemptions.
Disclaimer: This guide covers capital gains taxation as per the Finance Act 2024 and Finance Bill 2026. Tax rules are complex and asset-specific. This is for informational purposes only. Consult a qualified Chartered Accountant before making investment or tax decisions. We are not SEBI-registered advisors.