Stories
LTCG Tax on Stocks, Mutual Funds, Property and Gold Explained
- •Long-term capital gains tax is generally set at 12.5 percent across various asset classes including stocks, mutual funds, property, and gold, though holding periods and exemption limits differ.
- •Listed equity shares and equity mutual funds held for more than 12 months qualify for LTCG tax at 12.5 percent on gains exceeding Rs 1.25 lakh per financial year.
- •Property and gold require a holding period of more than 24 months for LTCG treatment, and indexation is generally removed except for certain resident individuals and HUFs who acquired property before July 23, 2024.
- •Finance Minister Nirmala Sitharaman expressed willingness to hear views on LTCG tax and securities transaction tax ahead of Budget 2027, sparking discussions on potential tax relief.
- •Experts advise investors to carefully evaluate post-tax returns across different asset classes before making investment decisions rather than relying solely on pre-tax returns.
Key Questions Answered
Listed equity shares and equity-oriented mutual funds qualify as long-term investments when held for more than 12 months, and their long-term capital gains are taxed at 12.5 percent on aggregate gains exceeding Rs 1.25 lakh in a financial year.
No, the exemption from long-term capital gains by investing in capital gains bonds is available exclusively for LTCG arising from the transfer of land or a building, and it does not apply to the sale of shares.
For property and gold, the holding period required to qualify for long-term capital gains treatment is more than 24 months. Long-term gains for these assets are typically taxed at 12.5 percent without indexation, although specific relief is available for resident individuals and HUFs who acquired property before July 23, 2024.
