Calculate LTCG & STCG tax on equity shares and mutual funds — with the ₹1.25 lakh annual exemption
Both are taxed identically under Section 111A / 112A — STT must have been paid on the transaction.
STT itself is not deductible from the gain — only brokerage and other transfer expenses are.
Dates are optional — set them to auto-detect short-term vs long-term. Leave blank and use the toggle above instead.
Other equity LTCG realised earlier in the same FY reduces how much of the ₹1.25 lakh exemption is left for this transaction.
Disclaimer: Covers equity shares and equity mutual funds (STT-paid) only, taxed under Sections 111A (STCG) and 112A (LTCG). Debt funds, real estate, gold, and unlisted shares follow different rules not covered here. This is an estimate — consult a Chartered Accountant before filing.
When you sell equity shares or equity mutual fund units for more than you paid, the profit is a capital gain — and it's taxed differently depending on how long you held the investment. Indian tax law splits equity gains into two categories, each with its own section, rate, and rules.
These are the rates effective from 23 July 2024 (Budget 2024), confirmed unchanged by Budget 2026:
| Short-Term (STCG) | Long-Term (LTCG) | |
|---|---|---|
| Holding Period | < 12 months | ≥ 12 months |
| Section | 111A | 112A |
| Tax Rate | 20% | 12.5% |
| Annual Exemption | None | ₹1,25,000 |
| Indexation Benefit | Not applicable | Not applicable (removed for equity from Budget 2024) |
The holding period runs from the date you bought the share or mutual fund unit to the date you sold it — not the settlement date.
If you bought the same stock or fund on different dates, the First-In-First-Out (FIFO) method applies — the oldest units are considered sold first.
Each SIP instalment is treated as a separate purchase with its own holding period — a single SWP or redemption can produce a mix of STCG and LTCG lots.
Bonus shares get a fresh holding period from their allotment date. Rights shares are similarly treated as a new acquisition from the date of allotment, not the original holding.
You invested ₹5,00,000 in an equity mutual fund and sold your units 18 months later for ₹8,00,000 — a gain of ₹3,00,000. You haven't booked any other equity LTCG this financial year.
Exemption applied: First ₹1,25,000 of the gain is tax-free.
Taxable gain: ₹3,00,000 − ₹1,25,000 = ₹1,75,000
Tax payable: ₹1,75,000 × 12.5% = ₹21,875
Your effective tax rate on the full ₹3,00,000 gain works out to about 7.3% — well below the flat 12.5% rate, because of the exemption.
For large long-term gains, when you sell can matter almost as much as what you sell — because the ₹1.25 lakh exemption resets every financial year.
Only genuine costs of buying and selling reduce your taxable gain — not every charge on your contract note qualifies.
| Cost | Deductible? |
|---|---|
| Brokerage on purchase and sale | Yes — deductible |
| Depository Participant (DP) charges | Yes — deductible |
| Securities Transaction Tax (STT) | No — not deductible for STT-paid equity transactions |
| GST on brokerage | Yes — deductible, as part of the transfer expense |
| Stamp duty on the transaction (not property) | Yes — deductible |
| Advisory or portfolio management fees | No — not a direct cost of the specific transfer |
In practice, brokerage and DP charges are the two costs that matter most for retail investors — keep your contract notes so you can substantiate these deductions if needed.
Long-term capital gains on equity shares and equity mutual funds (held 12 months or more, STT paid) are taxed at a flat 12.5% under Section 112A, with the first ₹1,25,000 of such gains in a financial year exempt from tax. This rate applies from 23 July 2024 onward, up from the earlier 10% rate.
Short-term capital gains on equity shares and equity mutual funds (held less than 12 months, STT paid) are taxed at a flat 20% under Section 111A. There is no exemption for STCG — the full gain is taxable from the first rupee.
It's a combined annual limit across all your equity long-term capital gains in a financial year — not per transaction and not per stock or fund. If you've already used part of the exemption on an earlier sale in the same FY, only the remaining portion is available for a new sale.
No. The ₹1,25,000 exemption resets each financial year and does not carry forward if unused. Many investors deliberately book gains up to this limit annually — even if reinvesting immediately — to use the exemption before it lapses.
Each SIP instalment is treated as a separate purchase with its own holding period, calculated from that specific instalment's date to the sale date. When you redeem, the First-In-First-Out (FIFO) method applies, so the oldest units are considered sold first — a single redemption can therefore include a mix of short-term and long-term gains.
Yes. Short-term capital losses can be set off against both short-term and long-term capital gains. Long-term capital losses can only be set off against long-term capital gains, not short-term gains. Any unabsorbed loss can be carried forward for up to 8 assessment years, provided the loss is reported in a return filed on time.
No — this calculator covers only equity shares and equity mutual funds where STT was paid. Debt mutual funds purchased on or after 1 April 2023 no longer get LTCG treatment or indexation and are taxed at your income tax slab rate regardless of holding period. Real estate, gold, and unlisted shares follow entirely different rules involving indexation and different holding-period thresholds, which are outside this calculator's scope.
No — Securities Transaction Tax (STT) paid on the sale of equity shares or equity mutual fund units eligible for Section 111A/112A tax treatment is not deductible from the sale value while computing capital gains. Only brokerage and other genuine transfer expenses can be deducted.
Prior to 23 July 2024, LTCG on equity above ₹1,00,000 was taxed at 10%. Budget 2024 raised this to 12.5% and simultaneously raised the exemption threshold from ₹1,00,000 to ₹1,25,000, effective for transfers made on or after 23 July 2024.
A capital loss can offset capital gains rather than being taxed. Short-term capital losses can be set off against both short-term and long-term capital gains in the same year. Long-term capital losses can only be set off against long-term capital gains. Any unused loss can be carried forward for up to 8 assessment years, but only if it's reported in a tax return filed on or before the due date.
Yes — this is a legitimate timing strategy, not a loophole. Since the ₹1.25 lakh LTCG exemption applies per financial year, staggering a large sale across two or three financial years lets you use the exemption multiple times rather than once, which can reduce total tax on a large gain. This only makes sense if you don't need all the proceeds immediately and are comfortable holding the remaining position during that time.
Brokerage, Depository Participant (DP) charges, GST on brokerage, and transaction-related stamp duty are all deductible against your sale value when computing the gain. Securities Transaction Tax (STT) itself is not deductible for equity transactions eligible for Section 111A/112A treatment, and advisory or portfolio management fees are not treated as a direct cost of a specific transfer.
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