Question 1

What are the capital gains tax rates for FY 2026-27?

Accepted Answer

The Finance (No.2) Act 2024 rates still apply, unchanged by Budget 2026. **LTCG is 12.5% without indexation** under section 112. Listed equity and equity-oriented mutual funds with STT are also **12.5%** under section 112A, with the first **Rs 1.25 lakh** of such gains each year exempt. **STCG is your slab rate**, except STT-paid listed equity and equity-oriented funds, which are **20%** under section 111A. A **4% health and education cess** applies on top of the tax, once. Indexation has been abolished for every asset class bar one narrow carve-out for land and building.

Question 2

How is the holding period calculated for determining LTCG vs STCG?

Accepted Answer

There are now only two thresholds. **Listed securities** (equity shares, equity-oriented mutual funds, listed bonds) become long-term after **12 months**. **Everything else** — land, building, gold, unlisted shares — becomes long-term after **24 months**. The old 36-month category was removed for general capital gains. The count is calendar months from the date of acquisition, and the statute says *more than* the threshold, so an asset sold exactly 24 months to the day is still short-term.

Question 3

What is the Rs 1.25 lakh exemption for equity LTCG?

Accepted Answer

For listed equity shares and equity-oriented mutual funds held for more than 12 months **on which STT has been paid**, the first **Rs 1.25 lakh of long-term gain per financial year is exempt**. Only the excess is taxed at 12.5%. The limit is a single annual pool shared across all your section 112A gains, not one per holding. If STT was not paid, the gain falls under section 112 instead — still 12.5%, but with no Rs 1.25 lakh shelter.

Question 4

Can I carry forward capital losses to set off against future gains?

Accepted Answer

Yes. **Short-term capital losses** can be set off against both STCG and LTCG. **Long-term capital losses** can only be set off against LTCG. Unabsorbed losses can be carried forward for up to **8 assessment years**. File your ITR before the due date or the carry-forward is lost. Note that where the 20%-with-indexation option below produces a loss, that loss cannot be claimed or carried forward — the relief is capped at reducing the tax, nothing more.

Question 5

Who can still claim indexation on a property sale?

Accepted Answer

Only a **resident individual or HUF**, only on **land or a building**, and only where the property was **acquired before 23 July 2024**. For them, tax is the **lower of 12.5% on the unindexed gain and 20% on the indexed gain** — the proviso to section 112 simply ignores the excess. It is not available to non-residents, companies, firms or LLPs, and it does not extend to gold, unlisted shares, mutual funds or any other asset class, whenever they were bought. For property bought on or after 23 July 2024 there is no indexation for anyone.

Capital Gains Comprehensive

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