Capital gains — the framework
In this chapter: Equity, debt, gold, real estate · Holding period, indexation (where still applicable), grandfathering
Capital gains arise on sale of capital assets at a profit. Tax depends on asset type and holding period. Equity (>12 months = LTCG): 12.5% above ₹1.25L. Equity (≤12 months = STCG): 20%. Debt (any holding period from April 2023): slab rate, no indexation. Real estate (>24 months = LTCG): 20% with indexation OR 12.5% without (post-2024 Budget choice for resident sellers).
Equity: STCG 20%, LTCG 12.5% above ₹1.25L per year (post-Budget 2024). Equity-oriented funds (>65% domestic equity) follow the same rule. Debt funds (post-April 2023): all gains slab-rate. International funds (>65% foreign equity): historically debt-treated; recent changes for specified categories. Gold ETFs/funds: slab rate post-April 2023. Sovereign Gold Bonds: capital gains exempt at maturity (8-year hold), interest taxable. Real estate (post-2024 Budget): residents can choose 20% LTCG with indexation or 12.5% without indexation — choose whichever is lower. Grandfathering: equity LTCG before Jan 31, 2018 is exempt to that point; only post-Feb 2018 appreciation is taxable.
A nuance: the indexation choice for real estate (post-2024) is per-property, not per-portfolio. So for two properties sold in same year, one might be optimised with indexation and the other without. Calculate both ways before filing. Also: grandfathering applies only to equity assets held on 31 Jan 2018 — fair market value (FMV) on that date sets the new cost basis. AMC-issued statements typically already reflect this for mutual fund holders; for direct equity, you compute it from historical price data.