Capital Gains Tax in India: Short-Term, Long-Term & Exemptions Explained

When you sell a capital asset — property, shares, mutual funds or gold — the profit is taxed as a capital gain. How much you pay depends on the asset type and how long you held it.

Short-term vs long-term

The holding period determines the classification, and it differs by asset:

• Listed shares & equity mutual funds: long-term if held over 12 months
• Immovable property & unlisted shares: long-term if held over 24 months
• Other assets (gold, debt funds): longer holding periods apply

How gains are taxed

Short-term gains are generally taxed at your slab rate (with a special rate for listed equity). Long-term gains enjoy concessional rates, and property LTCG benefits from indexation, which adjusts the cost for inflation.

Key exemptions

• Section 54: reinvest gains from residential property into another residential property
• Section 54F: reinvest gains from other assets into a house
• Section 54EC: invest gains in specified bonds within six months

For non-residents and foreign investors

Non-residents face TDS on the sale of Indian assets, and the DTAA between India and their home country can reduce the effective rate. Proper documentation (TRC, Form 10F) is essential.

Reporting

Capital gains are reported in your income tax return with asset-wise detail. Advance tax may apply on large gains to avoid interest.

Statura advises on capital gains, exemptions and cross-border tax for individuals and companies.