Capital Gains Tax FY 2025-26 explains how profits from selling capital assets such as shares, mutual funds, real estate, and gold are taxed in India. Understanding capital gains tax rules, holding periods, and applicable tax rates is essential for effective tax planning during the financial year 2025-26.
WHAT IS CAPITAL GAIN AND CAPITAL GAINS TAX ?
The Article on ” TAX PLANNING FOR FY 2025-26 CONTAINS 11 PARTS
PART I: MAJOR CHANGES IN TAX RULES FOR FY 2025-26
PART 2 : TAX SLABS /RATES FOR FY 2025-26
PART 3 : TAX REBATES FOR FY 25-26
PART 4 : CAPITAL GAIN TAX FOR FY 2025-26
PART 5 : TAX ON SALE OF RESIDENTIAL PROPERTY
PART 8 : INCOME TAX CALCULATOR FOR FY 2025-26
PART 9 : TAX ON RETIREMENT BENEFITS FOR FY 2025-26
PART 10 : HOW TO PAY INCOME TAX ONLINE?
PART 11 : TO KNOW ALL ABOUT TDS RATES ,
PART 4 – CAPITAL GAINS TAX FOR 2025 -26
Learn about the differences between short term and long term capital gains and how they are taxed. Explore the benefits of capital gains bond schemes.
Capital Gain is the profit you earn when you sell a “Capital Asset” (like shares, mutual funds, real estate, or gold) for more than what you paid for it. This profit is treated as income and is taxable.
For FY 2025-26, there is a significant rationalization of the definitions of Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG) compared to previous years. The government has simplified the “holding period” buckets
1. New Definitions: Holding Periods
The complex 12/24/36-month rules have been simplified into just two categories for almost all assets:
| Asset Category | Short-Term (STCG) | Long-Term (LTCG) |
| Listed Securities (Equity shares, Equity MFs, Units of Business Trusts) | Held for 12 months or less | Held for more than 12 months |
| All Other Assets (Real Estate, Gold, Unlisted Shares, Hybrid/Gold MFs*) | Held for 24 months or less | Held for more than 24 months |
What Changed? Previously, assets like gold, unlisted shares, and certain non-equity funds required a 36-month holding period to be considered “Long-Term.” This has now been reduced to 24 months for uniformity.
2. Tax Rates for FY 2025-26
The tax rates were revised in 2024 and remain the same for the current 2025-26 cycle:
- Equity-Oriented Assets (Listed):
- STCG: Increased to 20% (from 15%).
- LTCG: Increased to 12.5% (from 10%).
- Exemption: The first ₹1.25 Lakh of total LTCG (combined across stocks and MFs) is tax-free every year.
Other Assets (Real Estate, Gold, Unlisted Shares):
- STCG: Taxed at your Income Tax Slab Rate.
LTCG: Uniformly 12.5% (with some exceptions for property bought before July 2024)
3. The “Debt Fund” Exception
The definition for Debt Mutual Funds (those with less 35 % equity) remains a special case:
- Bought after April 1, 2023: These no longer have an “LTCG” benefit. All gains, regardless of how long you hold them, are taxed at your Slab Rate.
- Bought before April 1, 2023: If held for more than 24 months, they are taxed at 12.5%.12
4. Major Change: Removal of Indexation
The biggest “definitional” change for FY 2025-26 is the removal of indexation for most assets.
- In the past, you could adjust the purchase price of gold or real estate for inflation (indexation).
Now: You pay a lower flat rate of 12.5% on the actual profit, but you cannot use indexation to reduce that profit (except for properties acquired before July 23, 2024, where you have a choice between 20% with indexation or 12.5% without).
Summary of Changes at a Glance
- Uniformity: Holding period for non-listed assets reduced from 36 to 24 months.
- Rate Hike: Listed Equity STCG is now 20%; LTCG is 12.5%.
- Higher Exemption: The LTCG tax-free limit for equity is now ₹1.25 Lakh (up from ₹1 Lakh).
- No Indexation: Most long-term gains are now calculated on the “simple profit” at 12.5%
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THIS ARTICLE CARRIES INFORMATION ON VARIOUS TAX PROVISIONS WHICH ARE GENERALLY USEFUL . YET IT DOES NOT CARRY ALL THE PROVISIONS AND HENCE YOU ARE ADVISED TO GO THROUGH INCOME TAX DEPARTMENT WEBSITES FOR AUTHENTIC COMPLETE ITNFORMATION . YOU MAY ALSO CONSULT A QUALIFIED TAX CONSULTANT / CHARTERED ACCOUNTANT FOR ANY CLARIFICATION. READERS ARE ALSO WELCOME TO SEND FEEDBACK , FORM AVAILABLE BELOW . WE ARE OPEN FOR CORRECTION IF NEEDED
This article is for informational purposes only. It summarises updates from publicly available sources and AI-generated insights. We have extensively used information gathered from a reputed AI app in preparing this article We are not SEBI-registered investment advisors, and this content does not constitute investment advice