LTCG Tax Calculator

Long-Term Capital Gains Tax on Equity — 12.5% Above ₹1.25 Lakh

LTCG on listed equity shares and equity-oriented mutual funds is taxed at 12.5% flat — no slab rate, no surcharge complication at standard income levels. The rate applies to gains above ₹1.25 lakh per financial year. Below that, you pay nothing.

This 12.5% applies regardless of whether you're in the 5% slab or the 30% slab. It's one of the few cases in Indian tax law where your income bracket doesn't change the rate. A salaried professional with ₹30 lakh income and a retiree with ₹4 lakh income both pay the same 12.5% on LTCG above the exemption threshold.

Step-by-Step LTCG Calculation

Start with your total sale proceeds, subtract the cost of acquisition (or the FMV as on 31 January 2018 if purchased before that date under the grandfathering clause), subtract any directly attributable expenses like brokerage. That gives your gross LTCG. Then subtract the ₹1.25 lakh annual exemption. The remainder is your taxable LTCG.

If you've had multiple equity transactions in a year — some at a gain, some at a loss — you net them out. Long-term losses can offset long-term gains. However, LTCG cannot be offset against your salary, business income, or other non-capital-gain income. Unabsorbed LTCG losses can be carried forward for 8 assessment years.

LTCG Calculation: Step by Step

Indexation Removed for Equity — What It Means

Equity never had indexation. Unlike real estate or gold where you could previously inflate the purchase price using the Cost Inflation Index, equity gains have always been calculated on the raw purchase price versus sale price. Budget 2024 didn't change anything here — indexation for equity was never on the table.

The change that did happen for equity was the rate revision: LTCG went from 10% to 12.5%, and the exemption went from ₹1 lakh to ₹1.25 lakh. The exemption increase softens the blow for smaller investors, but anyone booking large gains every year pays meaningfully more than before.

LTCG Scenarios by Gain Size

Tax Harvesting to Utilise the ₹1.25 Lakh Exemption

Tax harvesting is the practice of booking long-term gains up to ₹1.25 lakh every year, then immediately buying back the same stock or fund. You reset your cost basis to current market price without paying any tax, and you've utilised the year's exemption.

The mechanics: sell on any day before 31 March, book the gain, buy back next trading day. There's no wash-sale rule in India as exists in the US — you can immediately repurchase the same security. Over 10–15 years of consistent harvesting, this can save several lakhs in future tax liability on your portfolio.

Two caveats: STT applies on both the sale and the repurchase. And you need to track the new acquisition date carefully — the holding period clock resets, so you'd need to hold again for 12 months before selling as LTCG.