Explainer · Capital Gains Rates

Long Term Capital Gains Tax Rate (India, 2026)

Updated for 2026 · Claw Editorial

There is no single long term capital gains tax rate in India; it depends on the asset and how long you held it. The 2024 Budget changed the rates and the holding periods, so a lot of older guidance online is now wrong. This guide sets out the LTCG rates by asset class as they stand for 2026, the short term rate on shares, and how the Capital Gain Account Scheme helps when you cannot reinvest in time, all with a caveat to confirm for your assessment year.

01What changed in 2024

The Finance (No. 2) Act, 2024 reworked capital gains for transfers made on or after 23 July 2024. The main shifts, which you should confirm for your assessment year, were:

• A standard long term rate of 12.5% without indexation for most assets.
• Holding periods simplified to broadly 12 months for listed securities and 24 months for other assets to qualify as long term.
• The LTCG exemption on listed equity and equity mutual funds raised to Rs 1.25 lakh a year.
• For land and buildings acquired before 23 July 2024, a resident individual or HUF can choose the lower of 12.5% without indexation or 20% with indexation.

Because this is recent and can be amended, treat the figures below as a guide and verify the current position before you file.

02LTCG rates by asset class

Here is the broad picture across common assets for 2026:

The 12.5% rate is now the common thread for long term gains, with the big exception being the extra option on older property and the slab treatment of certain debt funds.

03Listed shares and equity mutual funds

For listed equity shares and equity-oriented mutual funds on which Securities Transaction Tax (STT) is paid:

• Held for more than 12 months, the gain is long term.
• Long term gains up to Rs 1.25 lakh in a year are exempt; the amount above that is taxed at 12.5%.

This annual exemption resets each year, so timing redemptions across financial years can keep more of the gain within the exempt band. There is no indexation on these gains.

04Short term rate on shares

If you sell listed equity shares or equity mutual funds within 12 months, the gain is short term and taxed under Section 111A. After the 2024 change, the short term rate on such shares is 20% (plus surcharge and cess), up from the earlier 15%.

For assets outside 111A (for example a property sold within 24 months, or unlisted shares within 24 months), the short term gain is simply added to your total income and taxed at your normal slab rate, not at a flat 20%.

There is no one capital gains rate. The asset decides it, the holding period decides short versus long, and the 2024 change moved several of the numbers.

05The Capital Gain Account Scheme

When you have a long term gain and plan to claim an exemption by reinvesting (for example under Section 54 or 54F) but cannot complete the purchase or construction before your return is due, the Capital Gain Account Scheme (CGAS) lets you park the gain in a special bank account to keep the exemption alive.

• You deposit the unused gain in a CGAS account with a notified bank (for example SBI) before the return due date.
• You then use the money for the qualifying purchase or construction within the allowed time.
• The interest on a CGAS account is set by the bank as notified and is itself taxable; it is not a fixed scheme-wide rate.

If you do not use the money within the time limit, the unused amount becomes taxable later. For a bond route that can exempt a long term gain, see Section 54EC capital gain bonds.

06Surcharge, cess and exemptions

The headline rate is not the whole bill:

• Surcharge can apply on higher incomes, though a cap applies to the surcharge on certain capital gains.
• Health and education cess applies on the tax plus surcharge.
• Exemptions under Sections 54, 54F and 54EC can reduce or remove the long term tax if you reinvest within the time limit.

So two people with the same gain can pay different amounts depending on their total income and whether they reinvest. Confirm the surcharge position for your income level for the year.

07How Claw Tax helps

Knowing the rate is the easy part. Applying the right holding period, choosing between 12.5% and 20%-with-indexation on older property, using the annual equity exemption well, and claiming a reinvestment exemption without losing it on a deadline is where the tax actually gets decided.

Claw Tax and Accounts is an online tax, GST and accounting service for India that connects you with a verified chartered accountant at a fixed, published price, with a Claw reviewer checking every filing before it is submitted.

For capital gains, a verified chartered accountant can classify each gain, apply the correct rate, set up a CGAS deposit or a Section 54 claim where it helps, and file your capital gains ITR, with a Claw reviewer checking the draft before it is submitted. Capital gains ITR filing starts from a fixed Rs 2,499 (see the published prices and book online at clawlaw.in/tax), or start with a free 20 minute call. This is help with getting the return right; it is not tax advice on your specific portfolio.

08Frequently asked questions