Capital Gains Tax Rules 2026-27: LTCG & STCG Tax Slabs for Stocks, Mutual Funds & Property
Tax Regime Applicability: Both Regimes
Understand Capital Gains Tax in India for FY 2026-27 / AY 2027-28. Learn about 12.5% LTCG with ₹1.25L annual exemption, 20% STCG on stocks & equity mutual funds, debt fund slab taxation, real estate indexation rules, and loss set-off strategies.
Analyst Verdict: Equity LTCG Rate: Long-Term Capital Gains on listed stocks and equity mutual funds are taxed at 12.5% for gains exceeding ₹1.25 Lakhs per financial year.
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Key Takeaways
- Equity LTCG Rate: Long-Term Capital Gains on listed stocks and equity mutual funds are taxed at 12.5% for gains exceeding ₹1.25 Lakhs per financial year.
- Equity STCG Rate: Short-Term Capital Gains on listed stocks and equity mutual funds held for less than 12 months are taxed at 20%.
- Debt Mutual Funds & FDs: Gains from debt mutual funds purchased after April 1, 2023, are taxed as Short-Term Capital Gains at your applicable income tax slab rate.
- Real Estate Property LTCG: Unlisted real estate property held for >24 months is taxed at 12.5% without indexation (or 20% with indexation for pre-July 2024 acquisitions).
- Set-off & Carry Forward: Short-term capital losses can be set off against both STCG and LTCG, while long-term losses can only be set off against LTCG. Unadjusted losses can be carried forward for 8 assessment years.
Overview of Capital Gains Tax Framework in India (FY 2026-27)
Capital Gains Tax applies to profits earned from selling capital assets including stocks, equity mutual funds, debt funds, gold, bonds, and real estate property. The tax treatment depends on asset classification (Equity vs Non-Equity) and holding period (Short-Term vs Long-Term).
| Asset Category | Holding Period for LTCG | LTCG Rate (FY 2026-27) | STCG Rate (FY 2026-27) |
|---|---|---|---|
| Listed Stocks & Equity Mutual Funds | > 12 Months | 12.5% (Exempt up to ₹1.25L/yr) | 20% |
| Unlisted Shares | > 24 Months | 12.5% | Slab Rate |
| Real Estate Property / Land | > 24 Months | 12.5% (no indexation) / 20% (with indexation pre-2024) | Slab Rate |
| Physical Gold & Sovereign Gold Bonds (SGB) | > 24 Months | 12.5% | Slab Rate |
| Debt Mutual Funds (Post Apr 2023) | Any Tenure | Slab Rate (Taxed as STCG) | Slab Rate |
Equity LTCG & STCG Tax Rules (Stocks & Mutual Funds)
For equity shares listed on recognized Indian stock exchanges (BSE/NSE) and equity-oriented mutual funds (>65% gross equity exposure):
- Short-Term Capital Gains (STCG): Holding period ≤ 12 months. Taxed at a flat rate of 20% (plus 4% Health & Education Cess).
- Long-Term Capital Gains (LTCG): Holding period > 12 months. Taxed at 12.5% on aggregate gains exceeding ₹1.25 Lakhs per financial year.
- Securities Transaction Tax (STT): STCG rate of 20% and LTCG rate of 12.5% apply provided STT was paid at entry and exit.
Real Estate Property Capital Gains Tax & Section 54 Exemptions
Selling residential property, land, or commercial real estate triggers capital gains tax under updated FY 2026-27 rules:
- Grandfathering Provision for Pre-July 23, 2024 Property: Taxpayers can choose the lower of 12.5% without indexation OR 20% with Cost Inflation Index (CII) indexation benefit.
- Section 54 Reinvestment Exemption: Reinvesting net capital gains into buying or constructing a new residential house within 2 years (or 3 years for construction) exempts LTCG up to ₹10 Crores.
- Section 54EC Capital Gains Bonds: Investing up to ₹50 Lakhs in specified 5-year bonds (NHAI, REC, PFC, IRFC) within 6 months of sale exempts property LTCG.
Frequently Asked Questions
Is ₹1.25 Lakhs equity LTCG exemption available every year?
Yes. Every taxpayer gets a fresh ₹1.25 Lakhs aggregate tax-free LTCG threshold on equity stocks and mutual funds every financial year under Section 112A.
Can I offset short-term stock losses against salary income?
No. Capital losses (STCL or LTCL) can only be set off against capital gains, never against salary, business income, or house property income.