Capital Gains Tax Calculator

Capital gains tax applies to profits earned from the sale of capital assets, including listed equity shares, equity mutual funds, debt funds, real estate, and physical gold. In Budget 2024 (Finance (No. 2) Act, 2024), the Indian government substantially restructured capital gains taxation, simplifying holding periods and standardizing tax rates across asset classes.

The FinToolkit Capital Gains Tax Calculator computes your exact short-term and long-term tax liabilities under the updated statutory rules, accounting for the new 12.5% Long-Term Capital Gains (LTCG) rate and the expanded ₹1,25,000 exemption on listed equities.

Updated holding periods & tax rates (Post-Budget 2024)

The revised tax framework categorizes capital assets into clear holding period thresholds:

Section 112A equity capital gains rules

For listed equity shares and equity-oriented mutual fund units sold on a recognized stock exchange with Securities Transaction Tax (STT) paid:

• Short-Term Capital Gains (STCG u/s 111A): Units held for 12 months or less are taxed at a flat rate of 20% (raised from 15% in Budget 2024).
• Long-Term Capital Gains (LTCG u/s 112A): Units held for more than 12 months qualify for an annual aggregate exemption of ₹1,25,000 per financial year (increased from ₹1,00,000). Net gains exceeding ₹1.25 Lakh are taxed at a flat rate of 12.5% (formerly 10%).

Real estate capital gains: indexation grandfathering option

For immovable property sold after 23 July 2024, the LTCG tax rate is 12.5% without Cost Inflation Index (CII) indexation benefits. However, to protect property owners who acquired assets prior to the rule change, the government introduced a grandfathering amendment:

For properties acquired before 23 July 2024 by resident individuals or HUFs, taxpayers can compute tax under both methods and pay whichever is lower:

1. New system: 12.5% tax on net capital gains computed without indexation.
2. Old system: 20% tax on net capital gains computed using indexation with the Cost Inflation Index (CII).

Worked equity calculation example

Consider an investor who purchased listed equity mutual fund units for ₹1,00,000 and sold them after 18 months for ₹2,75,000, generating a net capital gain of ₹1,75,000.

Frequently asked questions

Does the Section 87A rebate apply to capital gains?

Under the Second Proviso to Section 87A, the tax rebate of up to ₹60,000 under the new regime cannot be offset against special-rate capital gains taxes, such as Section 111A (20%) or Section 112A (12.5%). Special-rate capital gains tax must be paid even if total income is under ₹12 Lakh.

What is the basic exemption shortfall rule for resident taxpayers?

If you are a resident individual or HUF and your normal slab income (e.g. salary or interest) is less than the basic exemption limit (₹4 Lakh under the new regime, ₹2.5 Lakh under the old regime), the unexhausted shortfall can be offset against capital gains before tax is computed.

How are debt mutual funds taxed?

Under Section 50AA, mutual fund schemes investing less than 35% in domestic equity shares acquired on or after 1 April 2023 are classified as specified mutual funds. Capital gains from these funds are treated as short-term capital gains and taxed at your applicable slab rate regardless of holding duration.

Can capital losses be set off against other income?

No. Capital losses cannot be set off against salary, business income, or house property income. Short-term capital losses can be set off against both short-term and long-term capital gains. Long-term capital losses can only be set off against long-term capital gains. Unabsorbed losses can be carried forward for up to 8 assessment years.

How is property sale exempt under Section 54?

Under Section 54, long-term capital gains from selling a residential house can be fully or partially exempted if the gains are reinvested in purchasing another residential property within 1 year before or 2 years after the transfer, or constructing one within 3 years, up to a maximum limit of ₹10 Crore.

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