Positive: Long-term gain — lower tax rate applies
Held for 1 yrs — qualifies for LTCG. Tax payable: ₹22,750 (including 4% cess).
•Harvest ₹1.25L equity LTCG every March — sell and re-buy to reset cost basis tax-free
•Capital losses can offset gains: LTCG loss offsets LTCG, STCG loss offsets both STCG and LTCG
•File ITR-2 if you have any capital gains — ITR-1 does not support this
Tax Payable
Net gain: ₹2,77,250
Capital gains tax is levied on the profit you make when selling a capital asset — stocks, mutual funds, property, gold, or bonds. India distinguishes between Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG) based on how long you held the asset.
Equity & Equity MF: 12 months. Held over 12 months = LTCG at 12.5% (with ₹1.25L annual exemption). Under 12 months = STCG at 20%.
Property & Gold: 24 months. LTCG at 12.5%. STCG at your slab rate.
Debt Mutual Funds (post Apr 2023): Always taxed at your slab rate regardless of holding period. No LTCG benefit.
Equity and buyback LTCG up to ₹1.25 lakh per financial year is completely tax-free. This exemption is shared across all equity LTCG — not per stock. Smart investors harvest this every March by selling and re-buying.
Harvest ₹1.25L equity LTCG every March by selling and re-buying — tax-free gains, resets your cost basis.
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