The Classic Partners LLP
Capital Gain Overview
Sold shares, mutual funds, property, or gold? Understand how capital gains tax works in India — holding periods, tax rates, exemptions — and get your gains computed and filed correctly by CAs.
Get CG AdvisoryWhat is Capital Gains Tax?
Capital gain is the profit arising from the transfer of a capital asset — shares, mutual funds, land, buildings, gold, or other investments. Under the Income Tax Act, gains are classified as short-term (STCG) or long-term (LTCG) based on the holding period, and each is taxed at different rates.
After the Finance (No. 2) Act, 2024 (effective 23 July 2024), the rules were simplified: listed securities held over 12 months are long-term, while all other assets — including property and gold — become long-term after 24 months. Whether it's capital gain on securities or capital gain on sale of property, correct classification, computation, and reporting in ITR-2 or ITR-3 is essential to avoid notices.
Current Capital Gains Tax Rates (from 23 July 2024)
- Listed equity shares & equity mutual funds — STCG at 20% (Section 111A); LTCG at 12.5% above the Rs. 1.25 lakh annual exemption (Section 112A).
- Property, gold, unlisted shares & other assets — LTCG at 12.5% without indexation; STCG at your slab rate.
- Land/building bought before 23 July 2024 — resident individuals and HUFs can pay the lower of 12.5% without indexation or 20% with indexation.
- Debt mutual funds (bought on or after 1 April 2023) — always taxed at slab rates regardless of holding period.
What We Handle
Gain Classification
Correct STCG/LTCG categorisation for every asset class.
Computation
Cost, indexation (where applicable), improvements, and expenses.
Exemption Planning
Reinvestment exemptions under Sections 54, 54F, and 54EC.
Set-Off of Losses
Adjusting capital losses and carrying them forward for 8 years.
ITR Filing
Reporting gains correctly in ITR-2 with Schedule CG and 112A.
Advance Tax
Quarterly advance tax on gains to avoid 234B/234C interest.
Why Choose The Classic Partners
- Qualified Chartered Accountants handling capital gains across every asset class.
- Tax-optimised outcomes — every exemption, loss set-off, and grandfathering benefit claimed.
- Notice-proof reporting — computations that reconcile with AIS and broker statements.
- Transparent fees and a single point of contact for your filing.
Frequently Asked Questions
What is the difference between short-term and long-term capital gains?
The classification depends on the holding period: listed securities become long-term after 12 months, while all other assets like property, gold, and unlisted shares become long-term after 24 months. Long-term gains generally enjoy lower tax rates.
What is the LTCG tax rate on shares now?
LTCG on listed equity shares and equity mutual funds is taxed at 12.5% on gains exceeding Rs. 1.25 lakh in a financial year, without indexation, under Section 112A.
Is indexation still available on property sales?
For land or buildings acquired before 23 July 2024, resident individuals and HUFs can choose the lower of 12.5% tax without indexation or 20% with indexation. Property acquired on or after that date is taxed at 12.5% without indexation.
Which ITR form is used for capital gains?
Salaried individuals and HUFs with capital gains file ITR-2, while those with business income alongside capital gains file ITR-3. Gains are reported in Schedule CG, with listed equity details in Schedule 112A.
Can capital losses be adjusted against gains?
Yes. Short-term losses can be set off against both short-term and long-term gains, while long-term losses can be set off only against long-term gains. Unadjusted losses can be carried forward for 8 years if the return is filed on time.
Have capital gains this year?
Get them computed, optimised, and filed correctly by our CAs.
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