Long-Term Capital Gains (LTCG Rate)

Long-Term Capital Gains (LTCG) tax is a significant aspect of the Indian tax system, influencing investment strategies and financial planning. Understanding LTCG tax rates is crucial for investors looking to maximise their returns while complying with tax regulations. The tax is levied on profits earned from the sale of assets held for a longer duration, typically over 36 months. The holding period is reduced to 12 months for equity shares and equity-oriented mutual funds. The LTCG tax rate for these financial instruments is 10% for gains exceeding ₹1 lakh per annum without indexation benefit.

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Capital Gains Tax Union Budget 2024 key Changes

Changes to Long-Term Capital Gains Tax

What is a Long-Term capital gains tax?

What is the current tax rule for LTCG?

Tax on Long-term Capital Gain

• Listed Assets (e.g., Equity Mutual Funds, Stocks):
  • Tax Rate: 10%
  • Condition: LTCG tax is applied if the gains exceed INR 1 lakh. No tax is levied if Securities Transaction Tax (STT) was paid on both the acquisition and sale of the securities.
• Other Assets (e.g., Gold, Debt Funds, Real Estate):
  • Tax Rate: 20%
  • Condition: The tax rate includes indexation benefits, which adjust the asset's purchase price for inflation.

1. Listed Securities Gains:
   • Tax Rate: 10%
   • Condition: This condition applies to long-term capital gains exceeding Rs. 1 lakh from selling listed securities under Section 112A of the Income Tax Act.
2. Other Assets:
   • Tax Rate: 20% plus applicable surcharge and cess
   • Condition: Includes returns from the sale of zero-coupon bonds, mutual funds, or UTI units sold on or before July 10, 2014.

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