Capital Gains Tax FY 2025-26: Stocks, Mutual Funds & Property

The 2024 Budget rewrote India’s capital gains framework, and FY 2025-26 is the first full year operating entirely under the new rules. Long-term equity is now 12.5%, indexation is gone for most assets, holding periods have been simplified, and several real estate and mutual fund nuances have shifted.

If you sold any asset during FY 2025-26 — listed shares, mutual funds, property, gold, ESOPs, crypto — this is the playbook for getting your AY 2026-27 capital gains computation right.

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The new holding period framework

Holding periods have been streamlined into just two categories:

Asset class	Long-term threshold
Listed equity shares & equity-oriented mutual funds	> 12 months
Unlisted shares, debt mutual funds, gold, property, debentures	> 24 months
Crypto / Virtual Digital Assets	No long-term — flat 30% always

The earlier 36-month threshold for non-listed assets is gone. Whether you sold a flat or a debt fund, 24 months is the magic number.

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Updated tax rates for FY 2025-26

Listed equity & equity mutual funds

Holding	Tax rate (post-23 July 2024 sale)
Short-term (≤ 12 months)	20% (was 15%)
Long-term (> 12 months)	12.5% above ₹1.25 lakh exemption (was 10% above ₹1L)

The ₹1.25 lakh annual LTCG exemption applies cumulatively across all listed equity and equity MF gains in the year. Plan partial harvesting accordingly.

Debt mutual funds

Acquisition date	Tax treatment
Purchased before 1 April 2023	LTCG at 12.5% (no indexation) if held > 24 months; STCG at slab if ≤ 24 months
Purchased on or after 1 April 2023	Always taxed at slab rate (no LTCG benefit, no indexation)

If you’re in the 30% slab, debt MFs are now economically equivalent to a fixed deposit from a tax standpoint.

Property (residential / commercial / land)

Sale date	Tax treatment
Sold before 23 July 2024	LTCG at 20% with indexation
Sold on / after 23 July 2024	Either 12.5% without indexation OR 20% with indexation — taxpayer’s choice (only if acquired before 23 July 2024)
Acquired & sold after 23 July 2024	12.5% without indexation only

The “taxpayer’s choice” lifeline applies only to resident individuals & HUFs for properties acquired before 23 July 2024. Run both numbers — for high-inflation, long-held properties, indexation often still wins.

Gold, ETFs, unlisted shares, debentures, etc.

Holding	Rate
Short-term (≤ 24 months)	Slab rate
Long-term (> 24 months)	12.5% (no indexation)

Sovereign Gold Bonds (SGB)

If held to maturity (8 years), capital gains are fully exempt. Selling on exchange before maturity attracts 12.5% LTCG (after 12 months) — special carve-out.

Crypto / VDA

Flat 30% on every gain, no holding period benefit, no loss set-off against any other head, no carry forward of crypto losses, plus 1% TDS on transfers above ₹10,000 (₹50,000 for specified persons).

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Worked example: Selling a flat in FY 2025-26

Profile: Mr Sharma sells his Mohali flat on 15 December 2025 for ₹1.5 Cr. He bought it on 10 May 2014 for ₹50 lakh. Indexation factor (CII): purchase year 240, sale year 376.

Option A: 12.5% without indexation

Item	Amount
Sale consideration	₹1,50,00,000
Cost of acquisition	₹50,00,000
LTCG	₹1,00,00,000
Tax @ 12.5% (+ 4% cess)	₹13,00,000

Option B: 20% with indexation

Item	Amount
Sale consideration	₹1,50,00,000
Indexed cost: ₹50L × (376/240)	₹78,33,333
LTCG	₹71,66,667
Tax @ 20% (+ 4% cess)	₹14,90,667

Verdict: Option A saves ₹1.9 lakh. For high-appreciation properties, indexation rarely catches up to the lower 12.5% rate. For modestly-appreciated properties (held 5-8 years in low-inflation periods), Option B can win — always run both.

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Section 54 and 54F — exemptions worth ₹crores

These are the two highest-value capital gains planning tools in the law:

Sec 54 — sale of residential house, reinvested in another residential house

• Cap: ₹10 Cr investment limit (introduced FY 2023-24)
• Buy 1 year before / 2 years after sale, OR construct within 3 years
• Lock-in: 3 years from acquisition / construction
• Up to 2 residential houses allowed if LTCG ≤ ₹2 Cr (once-in-a-lifetime)
• Exemption = lower of LTCG or amount invested

Sec 54F — sale of any LTCG asset (not residential house), reinvested in residential house

• Cap: ₹10 Cr
• Same purchase / construction timeframes
• Exemption is proportionate: (LTCG × Investment / Net consideration)
• Restriction: Must not own > 1 other residential house on date of transfer; must not buy/construct another within 2/3 years
• 3-year lock-in

Capital Gains Account Scheme (CGAS)

If you can’t reinvest before the ITR due date, deposit the LTCG into a CGAS account at a designated bank before the due date. The deposit preserves the exemption. Withdraw and invest within the prescribed period (2 years for purchase, 3 years for construction). Many taxpayers miss this, lose the exemption window, and pay ₹crores in unnecessary tax.

Sec 54EC — bonds (NHAI / REC / PFC)

• Cap: ₹50 lakh per FY (across all 54EC investments)
• Lock-in: 5 years
• Interest taxable at slab; capital invested is exempt from LTCG

A useful supplement when 54/54F doesn’t fully cover your gain, but the ₹50L cap and 5-year lock-in make it secondary.

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TDS on property sale (Sec 194-IA)

Buyer must deduct 1% TDS on sale consideration of immovable property if value ≥ ₹50 lakh. This is on the gross sale value, not the gain.

For NRI sellers, the rate is 20% (LTCG) or 30% (STCG) under Sec 195 — much higher. NRIs should obtain a Lower Deduction Certificate under Sec 197 to reduce TDS to actual liability. We cover this in detail in our Buying Property from an NRI guide.

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Set-off and carry-forward

Loss type	Same-year set-off	Carry-forward (8 years)
Short-term capital loss	STCG + LTCG	STCG + LTCG
Long-term capital loss	LTCG only	LTCG only
Crypto / VDA loss	Cannot set off against anything	Cannot carry forward

Carry-forward requires filing the return before the original due date — 31 July 2026 for non-audit cases.

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ESOPs and listed share options

ESOPs are taxed at two stages:

1. At exercise: Difference between FMV and exercise price is perquisite (salary income), taxed at slab.
2. At sale: Difference between sale price and FMV at exercise is capital gains, taxed at LTCG / STCG rates depending on holding from exercise date.

Eligible startup ESOPs (under Sec 80-IAC) can defer the perquisite tax for 5 years / sale / leaving company — whichever is earliest.

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Common capital gains mistakes

1. Forgetting CGAS deposit before ITR due date — the most expensive miss. Once the deadline passes, the exemption is lost.
2. Not adjusting for STT on equity LTCG — STT-paid equity LTCG qualifies for the 12.5% concessional rate. Off-market transfers without STT don’t.
3. Missing the ₹1.25L annual LTCG exemption — many taxpayers don’t realise this is available every year. Plan harvesting accordingly.
4. Treating debt MF gains as LTCG — for units bought after April 2023, this is wrong. They’re slab-rate, period.
5. Crypto losses set off against gains incorrectly — crypto losses cannot be set off against any other head. Each VDA P&L stands alone.

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How we handle capital gains computation

Every capital gains return we prepare goes through:

• Trade-by-trade reconciliation with broker, RTA, registrar statements
• CII application and Option A vs Option B comparison for property
• Sec 54 / 54F / 54EC exemption planning, with CGAS scheduling if needed
• ESOP perquisite vs capital gains bifurcation
• AIS / TIS reconciliation for every transaction
• Schedule CG, Schedule 112A, Schedule VDA properly populated

If you sold equity, mutual funds, property, or any other capital asset in FY 2025-26 — talk to us before filing. The cost of getting capital gains right is a fraction of the tax exposure if you get it wrong.

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Frequently Asked Questions

Is the ₹1.25 lakh LTCG exemption per scrip or total?

Total, across all listed equity and equity-oriented mutual fund LTCG in the year. Combined cap, not per holding.

I sold property in October 2025. Can I still claim indexation?

Yes, if you’re a resident individual / HUF AND the property was acquired before 23 July 2024. Run both 12.5% without indexation and 20% with indexation, choose the lower tax outcome.

What if I miss the Sec 54 reinvestment deadline?

You lose the exemption to that extent. The unused gain becomes taxable in the year the deadline expires (not the original sale year). Always deposit unused funds in a CGAS account before the ITR due date to preserve the window.

Are gains from US stocks (Apple, Tesla) taxed differently?

US stocks are unlisted from the Indian tax perspective. Long-term threshold is 24 months; LTCG taxed at 12.5% without indexation. STCG taxed at slab rate. Foreign tax credit available via Form 67 if US tax is also paid.

Do I need to file ITR-2 just for ₹50,000 of LTCG?

Yes. Any capital gains rule out ITR-1 / ITR-4. You must file ITR-2 (or ITR-3 if you have business income alongside). The ₹50,000 is reported in Schedule CG / 112A even if it’s below the ₹1.25L exemption.

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Related reading

• ITR Filing FY 2025-26: The Complete Guide
• Buying Property from an NRI: TDS Under Section 195
• F&O Traders ITR FY 2025-26
• NRI ITR Filing FY 2025-26