What is LTCG tax on stocks in India?

LTCG (Long-Term Capital Gains) tax on equity shares and equity mutual funds in India is 12.5% for FY 2025-26. Gains up to ₹1.25 lakh per financial year are exempt. LTCG applies when you hold equity shares or equity mutual fund units for more than 12 months.

What is the LTCG exemption limit for FY 2025-26?

The LTCG exemption limit is ₹1.25 lakh per financial year for FY 2025-26. This means the first ₹1.25 lakh of your long-term capital gains from equity shares and equity mutual funds is completely tax-free. Gains above this threshold are taxed at 12.5%.

How is LTCG calculated on stocks bought before February 1, 2018?

For shares bought before February 1, 2018 (grandfathering), the cost of acquisition is the higher of your actual purchase price or the Fair Market Value (FMV) on January 31, 2018. This grandfathering provision ensures gains accumulated before the LTCG tax was reintroduced are not taxed.

Is indexation benefit available for LTCG on equity?

No. Indexation benefit is not available for LTCG on equity shares and equity mutual funds. LTCG on equity is taxed at a flat 12.5% without indexation. Indexation was available for debt mutual funds under the old tax regime but was removed for most debt fund categories.

What is the LTCG tax rate for NRIs on Indian stocks?

NRIs pay LTCG tax at 12.5% on equity shares and equity mutual funds held for more than 12 months, same as resident Indians. However, for NRIs, TDS at 12.5% is deducted at the point of redemption or sale. NRIs can claim the ₹1.25 lakh exemption by filing an income tax return.

Can LTCG losses be set off against LTCG gains?

Yes. Long-term capital losses from equity can be set off against long-term capital gains from any capital asset. LTCG losses cannot be set off against short-term capital gains. Unabsorbed LTCG losses can be carried forward for up to 8 assessment years.

What documents are needed to calculate LTCG?

To calculate LTCG you need: purchase contract notes or broker statements showing purchase date and price, sale contract notes showing sale date and price, and for shares bought before February 1, 2018, the NSE/BSE closing price on January 31, 2018 for grandfathering calculation. Your broker's P&L statement typically has all this information.

Tax Tools

LTCG Calculator India

LTCG tax in India FY 2025-26: Gains above ₹1.25 lakh on equity shares or equity mutual funds held for more than 12 months are taxed at 12.5% under Section 112A, with no indexation benefit. Use this calculator to find your exact LTCG liability.

Includes Section 112A, ₹1.25 lakh annual exemption, grandfathering (FMV as of 31 Jan 2018), and 4% health and education cess. Free, instant, no signup.

sHQ

stoicHQ Research Team · Ex-quants, IIT Delhi · Updated June 2026

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Asset type

Buy price per unit (₹)

Sell price per unit (₹)

Number of units / shares

Date of purchase

Date of sale

Grandfathering price per unit (₹) - FMV as of 31 Jan 2018optional

LTCG gains already booked this FY (₹)for exemption calculation

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Enter your trade details to calculate tax

Not investment advice. stoicHQ provides this calculator for informational purposes. Consult a CA or tax adviser for filing. Tax laws may change.

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LTCG Tax Worked Examples - FY 2025-26

Pre-calculated scenarios for the most common situations. All figures assume FY 2025-26 and no prior LTCG booked.

Example 1: Infosys shares - basic LTCG

Bought 200 shares of Infosys at ₹1,200 on March 15, 2022. Sold at ₹1,800 on April 10, 2025.

Total Gain

₹1,20,000

Taxable Amount

₹0

Tax Payable

₹0

Gain of ₹1,20,000 is below the ₹1.25 lakh annual exemption - zero tax payable.

Example 2: HDFC Bank shares - above exemption

Bought 500 shares of HDFC Bank at ₹1,400 on Jan 10, 2023. Sold at ₹1,900 on Feb 15, 2025.

Total Gain

₹2,50,000

Taxable Amount

₹1,25,000

Tax Payable

₹16,250 (+ ₹650 cess = ₹16,900)

First ₹1.25L is exempt. Tax = 12.5% on the remaining ₹1,25,000 = ₹15,625 + 4% cess.

Example 3: Equity mutual fund - partial redemption

Invested ₹5,00,000 in Nifty 50 index fund on July 1, 2022. Current NAV grew to ₹8,50,000. Redeeming ₹4,25,000 worth (50%).

Total Gain

₹1,75,000

Taxable Amount

₹50,000

Tax Payable

₹6,500 (+ ₹260 cess = ₹6,760)

50% of the ₹3.5L gain = ₹1,75,000. Exemption: ₹1.25L. Taxable: ₹50,000. Tax = 12.5%.

Example 4: Grandfathering - pre-Jan 2018 purchase

Bought 1,000 shares of TCS at ₹500 in 2015. FMV on Jan 31, 2018 was ₹2,850. Selling today at ₹4,200.

Total Gain

₹13,50,000 actual, but cost basis = ₹28,50,000 (grandfathered FMV)

Taxable Amount

₹13,50,000

Tax Payable

₹1,53,125 (+ ₹6,125 cess = ₹1,59,250)

Grandfathering: cost = max(₹500, ₹2,850) = ₹2,850 per share. Gain = ₹4,200 − ₹2,850 = ₹1,350/share × 1,000 = ₹13,50,000. Tax: 12.5% on (₹13,50,000 − ₹1,25,000) = ₹15,31,250 × 12.5% = not: 12.5% on ₹12,25,000 = ₹1,53,125.

How is LTCG tax calculated on Indian stocks?

Under Section 112A of the Income Tax Act, long term capital gains on listed equity shares and equity mutual funds are taxed at 12.5% on gains above ₹1.25 lakh per financial year. Gains below ₹1.25L are fully exempt.

A holding period of more than 12 months qualifies as long term for listed equity. For debt mutual funds held after April 1, 2023, LTCG rules no longer apply - these are taxed at slab rates.

What is the grandfathering provision in LTCG?

For shares and equity MFs held before February 1, 2018, the cost of acquisition is deemed to be the higher of: (a) the actual purchase price, or (b) the fair market value (closing price on NSE/BSE) as of January 31, 2018. This protects gains earned before LTCG was reintroduced in Budget 2018. Enter the Jan 31, 2018 closing price in the "Grandfathering price" field above.

LTCG vs STCG tax rates (FY 2025-26)

Asset	Holding period for LTCG	LTCG rate	STCG rate
Listed equity shares (NSE/BSE)	> 12 months	12.5% (above ₹1.25L exempt)	20%
Equity mutual funds	> 12 months	12.5% (above ₹1.25L exempt)	20%
Debt mutual funds (post Apr 2023)	N/A	Slab rate (no LTCG)	Slab rate
Unlisted shares	> 24 months	12.5% (no indexation)	Slab rate
Property / real estate	> 24 months	12.5% (no indexation, post Jul 2024)	Slab rate

How to use the ₹1.25 lakh exemption?

Every financial year (April-March), the first ₹1.25 lakh of LTCG on equity is tax-free. If you have multiple sell transactions, enter the total LTCG already booked this year in the "Prior LTCG" field - the calculator adjusts the exemption accordingly.

Strategic tax harvesting: if your total LTCG is close to ₹1.25L at year end, consider booking more gains before March 31 - or deferring sales to the next financial year to start fresh.

Also useful: LTCG tax deep dive and worked examples · STCG calculator · Tax-loss harvesting guide · Understanding IPO gains and LTCG