Capital Gains Tax in India — FY 2025-26

STCG vs LTCG — what changed in Budget 2024

Budget 2024 (effective July 23, 2024) revised capital gains rates significantly. Short-term capital gains (STCG) on listed equity under Section 111A rose from 15% to 20%. Long-term capital gains (LTCG) under Section 112A rose from 10% to 12.5%, but the annual exemption increased from ₹1 lakh to ₹1.25 lakh. These rates apply to all transactions from FY 2024-25 onward and carry into FY 2025-26.

Holding periods that determine STCG vs LTCG

For listed equity shares and equity mutual funds: short-term is up to 12 months, long-term is over 12 months. For unlisted shares, property, and gold: short-term is up to 24 months, long-term is over 24 months. For debt mutual funds purchased after April 1, 2023: no LTCG concept — all gains taxed at slab rate regardless of holding period.

Capital gains on property — indexation removed

For property sold on or after July 23, 2024, LTCG is taxed at 12.5% without indexation. If the property was purchased before July 23, 2024, you have a choice: use 12.5% without indexation or 20% with indexation — whichever gives a lower tax liability. A CA will compute both and apply the better option.

Set-off and carry-forward rules

Short-term capital losses (STCL) can be set off against both STCG and LTCG in the same year. Long-term capital losses (LTCL) can only be set off against LTCG. Capital losses cannot be set off against salary, business income, or other sources. Any unabsorbed capital loss can be carried forward for up to 8 assessment years, but only if the ITR is filed on or before the due date (July 31, 2026).

Schedule 112A — scrip-wise reporting

For LTCG under Section 112A, ITR-2 requires scrip-wise (ISIN-wise) disclosure in Schedule 112A. This is mandatory for shares purchased before January 31, 2018, where the grandfathering provision (FMV as of that date) applies. FirstReports auto-generates Schedule 112A from your broker's P&L Excel report.

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