Long-Term Capital Gains (LTCG)
Profit from selling a capital asset held beyond a specified minimum period (commonly 12 or 24 months depending on the asset), taxed at rates generally lower than short-term gains.
In short
- Listed equity shares and equity mutual funds count as long-term once held beyond 12 months; most other assets, including property, gold, and unlisted shares, need more than 24 months.
- LTCG on listed equity and equity funds is taxed at 12.5%, but only on gains above ₹1.25 lakh in a financial year, combined across all such holdings.
- LTCG on property, gold, and unlisted shares is taxed at 12.5% with no indexation, except property bought before 23 July 2024, which can still choose 20% with indexation if that's cheaper.
- Indexation was withdrawn for most assets in the 2024 capital gains overhaul; property bought before 23 July 2024 is the one asset that keeps a choice.
Capital gains are classified as long-term once the underlying asset has been held beyond a minimum period that varies by asset type: listed equity shares and equity mutual funds generally use 12 months, while property, unlisted shares, and several other assets use 24 months. For FY 2026-27, LTCG on listed equity and equity mutual funds is taxed at 12.5%, but only on gains above ₹1.25 lakh in a financial year, an exemption that applies to your combined long-term equity gains, not separately to each holding. LTCG on property, gold, and unlisted shares is also taxed at 12.5%, but with no indexation benefit, except for property bought before 23 July 2024, which can still choose 20% with indexation if that works out cheaper.
Indexation, which used to shrink a taxable gain by adjusting the purchase price for inflation using the Cost Inflation Index, was withdrawn for most assets in the 2024 capital gains overhaul. The holding-period and rate rules have shifted across recent budgets, so it's worth confirming the specific rate and exemption threshold applicable for the year of sale rather than assuming an older figure still holds. Getting the holding-period classification right matters directly, since short-term and long-term gains on the same asset are often taxed quite differently. A full walkthrough by asset type is in our guide to capital gains tax on property, shares, and other assets, and the mutual-fund-specific version, including how SIP instalments are matched, is in how mutual fund gains are taxed.
Also referred to as: LTCG, long-term capital gains tax.
Frequently asked questions
What is the current LTCG tax rate in India?
12.5% for most assets, including listed equity, equity mutual funds, property, gold, and unlisted shares. Listed equity and equity fund LTCG is exempt on the first ₹1.25 lakh of gains each financial year; other assets have no such exemption.
How long do I need to hold an asset for it to count as long-term?
More than 12 months for listed equity shares and equity mutual funds. More than 24 months for property, gold, and unlisted shares.
Can I still claim indexation on long-term capital gains?
Only in one case: property bought before 23 July 2024, where you can choose between 12.5% without indexation and 20% with indexation, whichever works out lower. Every other asset lost the indexation benefit in the 2024 changes.
Is the ₹1.25 lakh LTCG exemption available on property or gold?
No. It applies only to long-term gains on listed equity shares and equity-oriented mutual funds. LTCG on property and gold is taxable from the first rupee.
Disclaimer
This glossary entry is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Rules and rates change, so consult a qualified Chartered Accountant for advice specific to your situation.