LTCG Tax Calculator 2026

Calculate Long-Term (12.5%), Short-Term (20%) Capital Gains Tax & Tax-Loss Harvesting strategies for Indian mutual funds & stocks.

Total Purchase Value (Buy Price)

₹

₹10,000₹1.00 Cr

Total Sale Value (Sell Price)

₹

₹10,000₹2.00 Cr

Holding Period (Months)

1120

Already Claimed LTCG Exemption This Year

₹

₹0₹1.25 L

Other taxable income (yearly)

₹

₹0₹5.00 Cr

Tax regime

Classification: Long-Term Capital Gain (LTCG)

Holding period is over 12 months. Taxed at 12.5% on profits exceeding ₹1.25 Lakh per financial year (Section 112A).

Total Tax Liability: ₹29,250; Effective Tax Rate: 8.4% of gross profit

Gross Profit: ₹3.50 L
Net In-Hand Profit: ₹3.21 L

Profit vs Tax Breakdown

Net In-Hand Profit: ₹3.21 L
Total Tax Paid: ₹29,250

Net Return on Investment: 64.15%

Step-by-Step Tax Calculation

Step / Particulars	Amount (₹)	Notes & Applicable Rules
Purchase Value (Buy Price)Initial cost of acquisition	₹5,00,000	Initial cost of acquisition
Sale Value (Sell Price)Gross realization on sale	₹8,50,000	Gross realization on sale
Gross Capital Gain / ProfitSale Value − Buy Value	₹3,50,000	Sale Value − Buy Value
Annual Tax-Free Exemption (Sec 112A)Max ₹1,25,000 per financial year (Budget 2024 limit)	− ₹1,25,000	Max ₹1,25,000 per financial year (Budget 2024 limit)
Taxable Capital GainGross profit less the exemption and any set-off	₹2,25,000	Gross profit less the exemption and any set-off
Base LTCG Tax (12.5%)12.5% of Taxable Gain	₹28,125	12.5% of Taxable Gain
Health & Education Cess (4%)4% on tax plus surcharge	₹1,125	4% on tax plus surcharge
Total Tax Liability PayableWhat the gain adds to your tax for the year	₹29,250	What the gain adds to your tax for the year
Final Net In-Hand ProfitGross Profit − Total Tax	₹3,20,750	Gross Profit − Total Tax

Capital Gains Visual Breakdown

Comparison between total purchase value, gross capital profit, tax liability, and net retained profit.

Tax Formulas

Standard Formula

Tax = (G − E − S) × r + R + SC, plus 4% cess and rounding D

Live Calculation (Plugging Your Values)

Gross Profit (G):₹3,50,000

Annual Tax-Free Exemption (Sec 112A) (E):₹1,25,000

Basic exemption set off (S):₹0

Tax rate (r):12.5%

87A change (R):+ ₹0

Surcharge (SC):₹0

Rounding to the nearest ₹10 (D):+ ₹0

Substituted Equation:

(₹3,50,000 − ₹1,25,000 − ₹0) × 12.5% = ₹28,125; ₹28,125 + ₹0 + ₹0 + cess ₹1,125, rounded to the nearest ₹10 (+ ₹0) = ₹29,250

Total Tax Liability:₹29,250

Long-term gains on listed equity are taxed at 12.5% under Section 112A after the annual ₹1,25,000 exemption (E); short-term gains at 20% under Section 111A. The gain sits on top of your other income: any part of the nil slab that income leaves unused is set off against the gain first (S), Section 87A is tested on total income with the gain included (R is the rebate it takes away, or under the old regime the rebate it gets), and above ₹50 lakh of total income a surcharge (SC) applies, capped at 15% on the gain's tax. 4% cess is charged on the tax plus surcharge, and the total is then rounded to the nearest ₹10 (Section 516 of the Income-tax Act, 2025). The year's tax is rounded both with the gain and without it, and D is the few rupees by which the two roundings differ. At most incomes S, R and SC are nil and the tax is simply the gain × rate × 1.04, plus D. A loss attracts no tax.

About Capital Gains Tax on Mutual Funds & Stocks (Budget Rules)

Capital Gains Tax applies when you sell listed equity shares or equity-oriented mutual funds at a profit. Under revised regulatory guidelines:

Long-Term Capital Gains (LTCG — Section 112A): Applies when equity investments are held for more than 12 months. Taxed at 12.5% on gains exceeding ₹1.25 Lakhs per financial year.
Short-Term Capital Gains (STCG — Section 111A): Applies when equity investments are held for 12 months or less. Taxed at 20% on the gain.
Tax-Loss Harvesting: An effective strategy where you sell profitable equity investments up to ₹1.25L before March 31 to utilize your zero-tax limit and immediately repurchase to reset your cost base.

Authoritative References

How these numbers are checked →

Capital Gains Tax FAQs

What are the capital gains tax rates on equity mutual funds?

Short-Term Capital Gains, on units held 12 months or less, are taxed at a flat 20% under Section 111A. Long-Term Capital Gains, on units held over 12 months, are taxed at 12.5% under Section 112A on gains above ₹1,25,000 in a financial year.

How does the ₹1.25 lakh LTCG exemption work?

The first ₹1,25,000 of equity LTCG each financial year is exempt. The exemption is per taxpayer per year and cannot be carried forward — if you do not use it, it is gone on 31 March.

Can short-term capital losses offset long-term capital gains?

Yes. Under Section 70(2) a Short-Term Capital Loss can be set off against both STCG and LTCG. A Long-Term Capital Loss, however, can only be set off against LTCG. Unabsorbed losses carry forward for 8 assessment years if the return is filed on time.

Does Section 87A rebate apply to capital gains tax?

Under the new regime, no: since the Finance Act 2025 the rebate does not reach tax on income at special rates, so STCG under Section 111A and LTCG under Section 112A stay payable even when total income is within ₹12 lakh. The gains also count in full towards that ₹12 lakh, so they can cost you the rebate on your slab tax as well. Under the old regime, when total income including the gains is ₹5 lakh or less, the rebate of up to ₹12,500 also covers Section 111A tax, but never Section 112A tax (Section 112A(6)).

In what order are capital losses set off against gains?

A short-term loss is the flexible one: it can be set off against either short-term or long-term gains. A long-term loss can only be set off against long-term gains. Since long-term equity gains are taxed at 12.5% and short-term at 20%, use a short-term loss against short-term gains first, where it saves more tax per rupee. Anything left after set-off is carried forward for eight assessment years, but only if you file the return by the due date.

How does grandfathering work for equity bought before 2018?

For listed equity and equity funds acquired on or before 31 January 2018, Section 112A lets you substitute a higher cost. Take the highest quoted price on 31 January 2018, compare it with your sale price, and use the lower of those two; then take the higher of that figure and your actual purchase cost. The effect is that gains that had already accrued up to 31 January 2018 stay exempt, while the calculator applies 12.5% only to growth after that date.

Is switching between mutual fund schemes a taxable redemption?

Yes. A switch is a redemption from one scheme and a fresh purchase in another, even when both are run by the same fund house and no money reaches your bank. Capital gains are computed on the units sold, and the new units start a fresh holding period from the switch date. The same applies to moving between regular and direct plans, and to a dividend or IDCW reinvestment, which is a fresh purchase with its own acquisition date.

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