Capital gains tax in India in 2026

Two clocks, then a rate

A capital gain is the sale price minus what you paid, minus what you spent to transfer it, minus the cost of improvements the Act allows. FY 2026-27 runs from 1 April 2026 to 31 March 2027. The rates below are for a sale in that year. They have been in force for sales from 23 July 2024, and the Finance Act, 2026 keeps them.

The first question is whether the gain is short-term or long-term. Section 2(101), which was section 2(42A), sets the clock. The usual line is 24 months. A listed security, a unit of an equity-oriented fund, a unit of the Unit Trust of India, or a zero-coupon bond uses 12 months. A sale on the anniversary is still short-term. The capital gains calculator uses that test.

The second question is the rate. For a sale in this window:

• Listed equity and equity-fund units, with securities transaction tax paid, are section 196 if short-term, at 20%. That was section 111A.
• The same equity, once long-term, is section 198 at 12.5% on the gain above ₹1,25,000 in the year. That was section 112A.
• Most other long-term gains are section 197 at 12.5%, with no ₹1.25 lakh exemption. That was section 112.
• Land or a building bought before 23 July 2024 can compare that 12.5% with 20% after indexation, and pay the lower one. That choice is section 197(3). It is for a resident individual or a Hindu undivided family.
• A specified mutual fund, including a debt fund, bought on or after 1 April 2023 is section 76. The gain is taxed at your slab whatever the holding period. That was section 50AA.

Cess is 4% on the tax. Surcharge on these special rates stops at 15%. The figures on this page were checked on 28 October 2026.

Listed equity

Bought on 1 January 2024 for ₹1,00,000, sold on 1 June 2026 for ₹4,00,000. The holding is more than 12 months, so it is long-term, more than 12 months. The gain is ₹3,00,000. Section 198 exempts ₹1,25,000 of that, because nothing else in the year has used the ₹1,25,000 line. Tax before cess on the rest is ₹21,875. With other taxable income of ₹15,00,000 in the new regime, the extra tax including cess is ₹22,750.

The same shares, bought on 1 January 2026 and sold on 1 June 2026 for a ₹1,00,000 gain, are short-term, 12 months or less. Section 196 charges 20%. Tax before cess is ₹20,000. The extra tax including cess is ₹20,800. There is no ₹1.25 lakh exemption on a short-term equity gain.

If you already sold other listed equity at a long-term gain this year, reduce the exemption you type. The ₹1,25,000 is for the year, not for each sale. A loss on another equity sale can change the gain before this rate is applied. The calculator takes one sale. Net the gains yourself first if you have more than one.

Listed equity bought before 1 February 2018 and sold as a long-term gain can use the grandfathering rule in section 90(7), which looks at the fair market value on 31 January 2018. The calculator has a box for that price. Do not type it for a share you bought later.

Equity funds and a monthly SIP

An equity-oriented fund uses the same 12-month clock and the same sections, 196 and 198, when securities transaction tax applies. A SIP is a series of purchases. Each instalment has its own date. Units from an instalment that has not finished 12 months are short-term even if the folio is years old. The SIP calculator projects a maturity. It does not split those units. When you redeem, the capital gains page is the one that prices the tax.

The ₹1.25 lakh exemption is available once the units are long-term. It is easy to spend it on a small redemption and then pay 12.5% on a larger one later in the same year. The order you sell does not create a second exemption.

Debt funds bought on or after 1 April 2023

A debt fund bought on 1 April 2024 for ₹1,00,000 and sold on 1 October 2026 for ₹1,50,000 has a gain of ₹50,000. The holding is more than two years. Section 76 still taxes it at slab rates. The calculator calls this “Taxed as a short-term gain, whatever the holding period”. With other taxable income of ₹15,00,000, the extra tax before cess is ₹7,500 and the extra tax with cess is ₹7,800. That is the 15% band of the new regime plus 4% cess, because ₹15,00,000 already fills the bands below.

A debt fund bought before 1 April 2023 is not in section 76. It can still be long-term after the holding period, at the section 197 rate. The calculator asks which purchase date applies. Do not tick the slab box for an older folio.

Property, and the indexation choice

A flat bought on 1 April 2020 for ₹50,00,000 and sold on 1 October 2026 for ₹80,00,000 was held for more than 24 months. It is long-term, more than 24 months. The gain without indexation is ₹30,00,000.

The flat was bought before 23 July 2024, so section 197(3) compares two bills. The Cost Inflation Index for 2026-27 is 384. The index for 2020-21, the year of purchase, is 301. Indexed cost is cost times 384 divided by 301. The calculator’s indexed cost is ₹63,78,738. The indexed gain is ₹16,21,262.

Tax at 12.5% on the plain gain is ₹3,75,000. Tax at 20% on the indexed gain is ₹3,24,252. The lower one is 20% with indexation. Tax on the gain before cess, on these numbers, is ₹3,24,252. The extra tax once cess and the rest of the return are counted is ₹3,37,222.

A house bought on or after 23 July 2024 does not get the 20% comparison. Long-term tax is 12.5% of the gain from the price you paid. Indexation is not a general relief anymore. It is this one choice, for this one kind of asset.

Sections 82 to 88, which were the old 54 series including 54, 54EC and 54F, can exempt part of a gain if you buy another house or specified bonds in time. The calculator does not apply them. If you are sure one of them applies, take that part off the gain before you type the sale. The section number guide is the crosswalk when an older article still says section 54.

Gold

Physical gold, jewellery and digital gold are not listed securities. The clock is 24 months, then section 197 at 12.5%, with no indexation and no ₹1.25 lakh exemption. A listed gold ETF uses 12 months because it is a listed security. Sovereign Gold Bonds have a separate rule for redemption by the original holder, narrowed by the Finance Act, 2026.

The worked examples, including a sale of jewellery around Diwali 2026, are in the guide to tax on gold. Use the gold rows on the same calculator. Do not put a gold ETF into the equity row. Equity rates need securities transaction tax and an equity-oriented fund, which a gold fund is not.

How the extra tax is counted

The examples add the gain to other taxable income of ₹15,00,000 and subtract the tax on that income alone. The difference is “extra tax because of this sale”. For a special rate, most of that difference is the special rate plus cess. For a slab asset such as the debt fund, the difference depends on which band your other income already fills.

A resident can use an unused nil band against some gains. Someone with no other income pays less than the headline rate on the first slice. Type the other income after the standard deduction and the deductions you actually get. If you leave it at zero, the calculator will use the nil band, and the tax will look too low for a person who already has a salary.

Section 156, the rebate up to ₹12 lakh in the new regime, does not cancel section 197 or section 198. A salary inside the rebate and a long-term equity gain in the same year can still produce tax on the shares. The slabs guide explains the rebate. Keep the two computations apart.

What to leave out of the sale price

Brokerage and other transfer costs reduce the gain. The examples use zero so the rate is easy to see. Type what you paid.

For property, the stamp duty you paid at purchase is part of the cost, not a separate deduction in the year of sale, if it was not already claimed. Improvements need their own year when indexation applies. The calculator asks for that year only when you type an improvement.

This page is one sale, for an individual, at the rates in force for FY 2026-27. It is not a set-off of every loss in the return, and it is not a notice reply. Check a large sale with a qualified person before you file.