Equity, Fixed Income & Macro

How is long-term capital gains tax on equity calculated in India?

Long-term capital gains tax on listed equity in India applies when shares or equity mutual funds are sold after holding them for more than twelve months. Gains above the annual exemption threshold are taxed at the applicable LTCG rate, with no indexation benefit on equity. For example, if you bought shares for one lakh rupees and sold them after two years for two lakh rupees, the one lakh gain is assessed against the year's exemption, and only the excess is taxed at the prevailing equity LTCG rate. Tax outcomes vary by individual; confirm current rates and thresholds with a qualified tax advisor.

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