What is capital gain?
Capital assets include shares, mutual funds, bonds, jewellery, patents, and similar investments. Personal-use items like furniture or clothes, and rural agricultural land, are generally not treated as capital assets.
Whether a gain is short-term or long-term depends on how long you held the asset before selling it.
| Capital asset | Short term | Long term |
|---|
| Listed shares | ≤ 1 year | > 1 year |
| Equity-oriented mutual funds | ≤ 1 year | > 1 year |
| Other property (gold, debt funds, realty, etc.) | ≤ 2 years | > 2 years |
Taxation of equity LTCG and STCG (current rates)
This calculator is for listed equity shares and equity-oriented mutual funds where STT applies.
| Type | Rate |
|---|
| Long-term capital gains (holding > 1 year) | 12.5% on gains above ₹1.25 lakh (no indexation) |
| Short-term capital gains (holding ≤ 1 year) | 20% (no indexation) |
ClearTax example
You bought 200 shares at ₹1,000 in May 2018 and sold them at ₹1,800 in January 2025.
Holding is more than one year, so the ₹1,60,000 profit is long-term capital gain. Exemption of ₹1.25 lakh leaves ₹35,000 taxable at 12.5% → tax of ₹4,375.
What is grandfathering?
When LTCG on equity became taxable from 1 April 2018, gains accrued until 31 January 2018 were protected. For shares/units bought on or before 31 January 2018, cost of acquisition is the higher of:
- Actual purchase cost
- Lower of fair market value as on 31 January 2018 and the sale value
How to use this calculator
- Choose holding period: ≤ 1 year (STCG) or > 1 year (LTCG).
- Enter sale value, purchase value, and transfer expenses such as brokerage.
- For LTCG, select whether you bought on/before or after 31 January 2018.
- If bought on/before that date, enter FMV as on 31 January 2018.
- Review capital gain, exemption, taxable gain, and tax.
