LTCG: Long-Term Capital Gains Tax in India (FY 2026-27)
LTCG (Long-Term Capital Gains) is the tax on profits from sale of capital assets held longer than the prescribed holding period, with rates and exemptions varying by asset class under the Income Tax Act 1961. The exemption limit on equity LTCG is ₹1.25 lakh per financial year per individual.
2 min read · Updated June 2026
Holding periods (post Finance Act 2024, effective July 23, 2024): listed equity shares, equity mutual funds, and listed business trusts → 12 months for LTCG. Unlisted shares, immovable property, gold, debt mutual funds, debentures → 24 months. Other movable assets and listed bonds → 12 months. Before this rule, the periods varied (24 vs 36 vs 12 months).
Tax rates (FY 2026-27 onwards, carried over from FY 2025-26): listed equity / equity MFs / listed business trusts → 12.5% on gains exceeding ₹1.25 lakh per FY (no indexation). STT-paid transactions only. Immovable property, gold, debt MFs, unlisted shares → 12.5% without indexation, OR for property bought before July 23, 2024 the resident has option of 20% with indexation. Foreign assets → 12.5% without indexation.
Worked examples (equity LTCG): ₹50,000 gain → ₹0 tax (below ₹1.25 lakh exemption). ₹1,75,000 gain → (₹1,75,000 − ₹1,25,000) × 12.5% = ₹6,250 tax + 4% cess = ₹6,500 total. ₹5,00,000 gain → (₹5,00,000 − ₹1,25,000) × 12.5% = ₹46,875 + 4% cess = ₹48,750 total. Use the Equity Capital Gains Calculator at /in/tools/equity-capital-gains-calculator to plug in your own numbers including loss set-off.
Property LTCG example (post-July 2024 purchase): bought a flat for ₹50 lakh, sold for ₹80 lakh after 3 years → ₹30 lakh LTCG × 12.5% = ₹3,75,000 + 4% cess = ₹3,90,000. No indexation benefit. If purchased BEFORE July 23, 2024, the resident seller can choose: 12.5% without indexation OR 20% with indexation — whichever is lower. Use the Property LTCG Calculator at /in/tools/property-ltcg-calculator for the indexation toggle.
Exemptions and roll-overs: Section 54 (residential property sale reinvested in another residential property within 2 years — or 1 year before — of sale). Section 54F (sale of ANY long-term capital asset reinvested in residential property; full exemption if entire net consideration is reinvested). Section 54EC (₹50 lakh in NHAI / REC / IRFC bonds within 6 months of sale, 5-year lock-in, ~5.25% interest). Carry forward of long-term capital losses for 8 assessment years, set-off only against future LTCG, only if ITR filed within the due date.
Recent changes and what to watch for: the ₹1.25 lakh equity LTCG exemption was raised from ₹1 lakh in Budget 2024 (effective July 23, 2024). The Budget 2026 (February 2026) kept the structure unchanged, so FY 2026-27 follows the same regime. The 12.5% rate without indexation — down from 20% with indexation for many asset classes — is broadly a simplification, though it reduces post-tax returns for older real-estate holders whose acquisition cost has been inflated meaningfully by indexation.
Tax-harvesting strategy: the ₹1.25 lakh exemption resets every FY. Booking equity LTCG up to ₹1.25 lakh and immediately rebuying the same fund creates a ₹1.25 lakh tax-free uplift in your cost base — effectively a free step-up. Done annually across both spouses (each gets their own ₹1.25 lakh exemption), a couple can shield ₹2.5 lakh of equity LTCG every year. Watch out for the 7-day STT-paid round-trip rule on the same scrip and ensure both the sale and the rebuy are STT-paid.
The ₹1.25 lakh exemption on equity LTCG is per FY per individual. Couples can each utilise separately — ₹2.5 lakh combined tax-free uplift per year. Booking LTCG up to ₹1.25 lakh and reinvesting is a legal optimisation that resets your cost base annually. Use Richify to track which holdings are sitting on unrealised LTCG and identify harvesting opportunities before March 31.
