Capital Gains Tax in India FY 2026-27: Rates and Holding Periods for Every Asset

The Short Answer

Capital gains tax in India now rests on three numbers. Long-term gains on almost every asset are taxed at 12.5%. Short-term gains on listed shares and equity funds are taxed at 20%; on most other assets, at your slab rate. And the first ₹1.25 lakh of long-term gains on listed shares and equity funds each year is tax-free.

What changes from asset to asset is how long you must hold for a gain to count as long-term: more than 12 months for listed shares, equity funds, gold ETFs and listed bonds; more than 24 months for property, physical gold, unlisted shares and funds of funds. Debt funds bought after March 2023 never become long-term.

These rules apply to sales from 23 July 2024 and continue unchanged for FY 2026-27 under the Income-tax Act, 2025. They are the same in the old and new regimes, and the ₹12 lakh rebate does not cover gains taxed at 20% or 12.5%.

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The Rates

Capital gains tax rates for every asset

Asset	Long-term after	Short-term gain	Long-term gain
Listed shares, equity mutual funds (STT paid)	12 months	20%	12.5% above ₹1.25 lakh a year
REIT and InvIT units	12 months	20%	12.5% above ₹1.25 lakh (shared limit)
Gold ETFs, listed bonds and debentures	12 months	Slab rate	12.5%
Gold and international funds of funds	24 months	Slab rate	12.5%
Land, house, flat	24 months	Slab rate	12.5%, or 20% with indexation if bought before 23 July 2024
Physical gold, jewellery, unlisted shares	24 months	Slab rate	12.5%
Debt mutual funds bought on or after 1 April 2023	Never	Slab rate	Slab rate
Debt mutual funds bought before 1 April 2023	24 months	Slab rate	12.5%
Sovereign Gold Bonds held to maturity by original subscriber	—	—	Exempt

All rates are before 4% cess. Surcharge on capital gains taxed at special rates is capped at 15%, even when your other income attracts more.

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How It Is Worked Out

Working out the gain

The gain is the sale value minus expenses on the sale (brokerage, the property broker’s commission) minus the cost of acquisition, and for property, the cost of improvements. Holding period runs from the date of purchase to the date of sale; “more than 12 months” means even one day short keeps the gain short-term.

Example: shares

Ravi bought shares for ₹5 lakh in June 2023 and sells them for ₹7.5 lakh in November 2026. He held them for more than 12 months, so the ₹2.5 lakh gain is long-term. The first ₹1.25 lakh is exempt; the remaining ₹1.25 lakh is taxed at 12.5%, or ₹16,250 with cess.

Shares bought before 1 February 2018

Gains up to 31 January 2018 are protected (“grandfathered”). Your cost is the higher of what you paid and the market value on 31 January 2018 (capped at the sale price). Brokers show this value in their capital gains statements.

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Equity and Mutual Funds

Shares and mutual funds

• The ₹1.25 lakh exemption is a single annual limit across all listed shares, equity funds and REIT/InvIT units, not per sale.
• Equity funds are those with at least 65% in Indian equity; hybrid funds below that line follow other rules.
• Each SIP instalment is a separate purchase with its own 12-month clock. Selling units bought in the last year creates short-term gains even if the SIP began years ago.
• Debt funds bought from April 2023 are taxed at your slab rate however long you hold them.
• Share buybacks are taxed as capital gains from 1 April 2026, on the gain over your cost, instead of as dividend on the full amount.

For more detail, see how mutual funds are taxed and how equity income is taxed, including intraday and F&O, which are business income rather than capital gains.

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Property

Selling a house, flat or land

A property held more than 24 months gives a long-term gain taxed at 12.5% without indexation. If you are a resident individual or HUF and bought the property before 23 July 2024, you can instead choose 20% with indexation, which raises your cost by inflation using the Cost Inflation Index. You pay whichever is lower.

Example

Anita bought a flat for ₹40 lakh in May 2015 and sells it for ₹90 lakh in November 2026. Without indexation, the ₹50 lakh gain at 12.5% means ₹6,50,000 of tax with cess. With indexation, her cost becomes ₹40 lakh × 384 ÷ 254 = about ₹60.5 lakh, the gain about ₹29.5 lakh, and the tax at 20% about ₹6,14,000. She chooses indexation and saves about ₹36,000.

Indexation helps most for property held a long time with modest price growth; for fast-rising property, 12.5% is often lower. The calculator compares both.

Ways to avoid the tax

• Buy another house (section 54 of the old Act): reinvest the gain in one residential house, bought within one year before or two years after the sale, or built within three years. The exemption is capped at ₹10 crore.
• Selling something other than a house (old section 54F): invest the whole sale proceeds in a residential house for a full exemption, proportionately less for less.
• Capital gains bonds (old section 54EC): invest up to ₹50 lakh of the gain in specified bonds within six months of the sale; they lock in for five years.
• Not ready to buy before filing? Park the amount in the Capital Gains Account Scheme at a bank before the return due date.

The buyer deducts 1% TDS on property worth ₹50 lakh or more. It is a credit against your tax, not the tax itself.

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Gold

Gold: physical, ETF, fund and bonds

Form	Long-term after	Long-term rate
Gold ETF (listed)	12 months	12.5%
Gold mutual fund (fund of funds)	24 months	12.5%
Physical gold and jewellery	24 months	12.5%
Sovereign Gold Bond, original subscriber, held to maturity	—	Exempt
Sovereign Gold Bond bought on the exchange, or sold early	12 months (listed)	12.5%

From FY 2026-27, the tax-free redemption of Sovereign Gold Bonds applies only to those who bought at the original issue and hold to maturity. Bonds bought later on the stock exchange are taxed on redemption.

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Losses

Setting off and carrying forward losses

• A short-term capital loss can be set off against any capital gain, short or long.
• A long-term capital loss can be set off only against long-term gains.
• Capital losses cannot be set off against salary or other income.
• Unused losses carry forward for eight years, but only if your return for the loss year is filed by the due date.

Booking a loss before 31 March on a holding you no longer want can reduce this year’s tax, and booking up to ₹1.25 lakh of long-term equity gains each year uses an exemption that otherwise lapses. See how tax harvesting works.

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Paying and Reporting

Paying the tax and reporting the sale

Capital gains tax is due in the year you sell. If your total tax after TDS is ₹10,000 or more, pay advance tax in the next instalment after the sale; interest is not charged for the instalments that fell before the gain arose. Report every sale in your return, even if the gain is exempt: ITR-2 for most individuals with capital gains, ITR-3 if you also have business income. Your Annual Information Statement already shows sales of shares, funds and property, so leaving them out triggers notices.

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Common Mistakes

Mistakes people make with capital gains

1. Missing the holding period by days

Long-term means more than 12 or 24 months. A sale one day early can turn a 12.5% gain into 20% or slab rate.

2. Assuming the ₹12 lakh rebate covers gains

It does not cover gains taxed at 20% or 12.5%, even if your total income is below ₹12 lakh.

3. Forgetting SIP instalments have their own dates

Redeeming a SIP fund sells the oldest units first, but recent units may still be short-term.

4. Not reporting exempt gains

Gains within ₹1.25 lakh, or exempt by reinvestment, still have to be shown in the return.

5. Filing late with losses

A late return forfeits the right to carry forward capital losses.

Questions

Frequently asked questions

What is the capital gains tax rate in India for FY 2026-27?

Long-term gains are taxed at 12.5% on most assets. Short-term gains on listed shares and equity funds are taxed at 20%; on other assets, at your slab rate. The first ₹1.25 lakh of long-term gains on listed equity each year is exempt.

When does a gain become long-term?

For listed shares, equity funds, gold ETFs and listed bonds, after more than 12 months. For property, physical gold, unlisted shares and funds of funds, after more than 24 months. Debt funds bought from April 2023 never become long-term.

Is indexation still available?

Only for land and buildings bought before 23 July 2024, by resident individuals and HUFs, who can choose 20% with indexation instead of 12.5% without. The Cost Inflation Index is 384 for FY 2026-27.

Does the ₹12 lakh rebate apply to capital gains?

No, not to gains taxed at the special rates of 20% or 12.5%. Short-term gains taxed at slab rate, such as on debt funds, are covered.

How can I save tax on the sale of a house?

By reinvesting the gain in another residential house within the time limits, by investing up to ₹50 lakh in specified capital gains bonds within six months, or by depositing the amount in the Capital Gains Account Scheme before filing your return if you have not bought yet.

Are SIP mutual fund gains long-term?

Each instalment is judged separately. Units held more than 12 months (equity funds) give long-term gains; recent instalments give short-term gains.