Capital Gains Tax on Shares & Equity Funds (FY 2026-27)
Updated 2026-10-30
Quick answer: For listed equity shares and equity-oriented mutual funds (STT paid), gains on holdings of up to 12 months are short-term and taxed at 20%; gains on holdings over 12 months are long-term and taxed at 12.5% on the amount above ₹1.25 lakh a year. Budget 2026 left these rates unchanged. 4% cess applies on top.
Short-term vs long-term
Listed shares and equity-fund units become long-term after being held for more than 12 months. Most other assets use a 24-month test.
Worked example
Buy 100 shares at ₹100 and sell at ₹150 within a year: gain ₹5,000, STCG tax 20% = ₹1,000, plus 4% cess = ₹1,040.
What changed in July 2024
For transfers on or after 23 July 2024, STCG rose from 15% to 20%, LTCG from 10% to 12.5%, and the LTCG exemption from ₹1 lakh to ₹1.25 lakh.
FAQs
Is there TDS on capital gains for residents?
Generally no — residents pay capital gains tax themselves through advance tax or self-assessment. TDS rules differ for non-residents.