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Tax & Investing

New Capital Gains Tax Rules: 12.5% LTCG & 20% STCG Impact on Portfolios

August 05, 2026 • 8 min read

Budget updates changed how capital gains from listed equities, equity mutual funds, debt instruments, and real estate are taxed across both Old and New Tax Regimes.

Summary of Current Capital Gains Rates

  • Equity LTCG (12.5%): Applies to listed stocks and equity mutual funds held for over 12 months. Long-term gains are tax-exempt up to ₹1.25 Lakhs per financial year.
  • Equity STCG (20%): Applies to equity holdings sold within 12 months, taxed at a flat rate regardless of income slab.
  • Debt Mutual Funds & Bonds: Taxed at your applicable income tax slab rate, irrespective of holding period.

    • Factoring Gains into Your Annual Tax Return

    Capital gains must be accurately matched with your Annual Information Statement (AIS) data from the Income Tax Department of India.

    Calculate your combined salary, interest, and capital gains tax on our Income Tax Calculator.

    Practical Tax Planning Tip

    Taxpayers can utilize annual LTCG harvesting by redeeming and reinvesting equity units up to the ₹1.25 Lakh tax-free limit each year. Calculate your total taxable liability on our Income Tax Calculator.