Capital gain taxation: Latest income tax rate and holding period for various assets for LTCG and STCG post Budget 2025

Capital gain taxation has gone through many changes in the past 7 years as LTCG of 10% was introduced in Budget 2018 in listed equities. Budget 2024 which was presented in July made several significant changes in tax rate and definition of holding period. However, Budget 2025 has made no changes to tax rate and the holding period of an asset for determining whether it is to be taxed as long term capital gains or short term. So the existing rules about LTCG and STCG will continue to apply for FY 2025-26 (AY 2026-27).

Here’s a table showing the latest table: With inputs from TOI

Types of asset	Holding period for long term capital asset	Long term capital gains (LTCG)	Short term capital gains (STCG)
Listed equity shares	12 months	Gains up to Rs 1.25 lakh exempt; balance taxable at 12.5% without indexation	20%**
Listed equity mutual funds	12 months	Gains up to Rs 1.25 lakh exempt; balance taxable at 12.5% without indexation	20%***
Listed tax-free bonds	12 months	12.5%, indexation benefit not available (interest from notified tax-free bonds is exempt from tax)	Tax at slab rates
Listed debentures	12 months	12.5%, indexation benefit not available (interest from notified tax-free bonds is exempt from tax)	Tax at slab rates
Debt mutual funds (more than 65% in debt and money market instruments)	24 months	If acquired prior to April 1, 2023: 12.5% without indexation Acquired on or after April 1, 2023: Tax at applicable slab rates, indexation benefit not available	If acquired prior to April 1, 2023: 12.5% without indexation Acquired on or after April 1, 2023: Tax at applicable slab rates, indexation benefit not available
Unlisted shares	24 months	12.5% without indexation	Tax at slab rates
Unlisted debentures and unlisted bonds	24 months	Tax at applicable slab rates, indexation benefit not available	Tax at applicable slab rates, indexation benefit not available
Immovable property	24 months	Acquired before July 23, 2024: 20% with indexation or 12.5% without indexation Acquired on or after July 23, 2024: 12.5% without indexation	Tax at slab rates

**If STT of 0.1% each is paid by seller and buyer in both cases
***If STT of 0.001% is paid by seller; STT rates mentioned above are for delivery based transactions only

Exemption available if STT paid on sale and also on purchase, in case of equity shares acquired on or after October 1, 2004 (subject to certain exceptions notified)

Section 87A tax rebate not available on any capital gains income from equities

Budget 2025 has made changes to Section 87A which is now not available on both short term capital gains from sale of equities and long term capital gains from equities. Budget 2025 said, “...Rebate of income-tax is not available on tax on incomes chargeable at special rates like STCG under section 111A, LTCG under section 112).

“While the slab benefit has significantly been increased in the new regime u/s 115BAC, however, the bar of rebate benefit under section 87A on special rate related incomes such as Capital gains, speculative income from lotteries etc. does not extend to old regime and remain available under the said regime, said Rahul Garg, Managing Partner, Asire Consulting, which advises on tax, assurance and regulatory matters.

With inputs from TOI