Capital Gains Tax in India: Complete Guide After Budget 2024

Budget 2024 changed LTCG and STCG rates. Here are the new rules for equity, debt, real estate, and gold — with worked examples.

1.New rates after Budget 2024

**Equity (stocks, equity MFs)**: STCG (held < 1 year) = **20%**. LTCG (held > 1 year) = **12.5%** on gains above ₹1.25 lakh/year. **Debt MFs (bought after April 2023)**: gains taxed at slab rate regardless of holding period. **Real estate**: LTCG (held > 2 years) = **12.5%** without indexation (new rule) — seller can choose old 20% with indexation if acquired before July 2024. **Gold/international funds**: LTCG (held > 2 years) = 12.5% without indexation.

2.Equity capital gains: worked example

Bought Nifty index fund for ₹5 lakh in 2023. Sold for ₹9 lakh in 2026 (held 3 years). Gain = ₹4 lakh. LTCG exemption: ₹1.25 lakh. Taxable LTCG: ₹2.75 lakh. Tax = ₹2.75 lakh × 12.5% = **₹34,375** + 4% cess = ₹35,750. Effective tax rate on total gain: 8.9%. If sold within 1 year: STCG = ₹4 lakh × 20% = ₹80,000 + cess = ₹83,200. Holding for 1+ year saves ₹47,450 in tax.

3.Real estate capital gains: the indexation choice

For property bought before July 23, 2024: you can choose between (A) 12.5% without indexation or (B) 20% with indexation. Example: flat bought in 2014 for ₹50 lakh, sold in 2026 for ₹1.2 crore. (A) 12.5% on ₹70 lakh = ₹8.75 lakh. (B) With indexation: indexed cost ≈ ₹88 lakh (CII 2014=240, 2026≈395). Gain = ₹32 lakh. Tax at 20% = ₹6.4 lakh. **Option B saves ₹2.35 lakh**. For high-appreciation properties, indexation usually wins.

4.Section 54/54EC: avoiding capital gains tax on property

Reinvest sale proceeds in a new residential property within 2 years (Section 54) — LTCG is exempt. Or invest up to ₹50 lakh in 54EC bonds (NHAI, REC) with 5-year lock-in — that portion of LTCG is exempt. These are powerful tools for property sellers. Example: ₹70 lakh LTCG on property sale. Buy a new house for ₹70 lakh+ → zero tax. Or invest ₹50 lakh in 54EC bonds + pay 12.5% on remaining ₹20 lakh = ₹2.5 lakh tax.

5.Key takeaway

Post-Budget 2024, equity investors benefit from lower LTCG (12.5% vs old 10%) but higher STCG (20% vs old 15%). Always hold equity for 1+ year. For property, choose between indexation and flat rate based on your acquisition date and appreciation. Use our capital gains calculator to compute your exact tax liability.