Latest tax rate and holding period for various assets for LTCG and STCG for AY 2025-26
The capital gains income taxation has seen several changes in the last seven years with the latest update occuring in Budget 2024 regarding the holding period and change in capital gains tax rate.
Income Tax Slabs FY 2025-26Income Tax Calculator 2025New Income Tax Bill 2025
Here’s a table showing the current tax rates for both long term (LTCG) and short term (STCG) capital gains:
| 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)
CA Suresh Surana, says: “The tax rates applicable on the transfer of capital assets, whether classified as Long-Term Capital Gains (LTCG) or Short-Term Capital Gains (STCG), remains unchanged irrespective of whether the taxpayer opts for the Old Tax Regime or the New Tax Regime.”
Section 87A tax rebate is available on any type of capital gains income- long or short of any asset?
Surana says that Section 87A does not restrict the rebate in respect of capital gains.
Surana says: “However, Section 112A(6) stipulates that the rebate shall be allowed only after reducing LTCG under Section 112A from total income, and this restriction applies solely to LTCG exceeding Rs. 1,25,000. It does not extend to short-term capital gains (STCG) under Section 111A or LTCG under Section 112.”
According to Surana, despite the statutory provisions in the law, the ITR utilities currently disallow rebate claims against such incomes, leading to system-based denials by CPC, Bengaluru.
Surana says: “Although the Income-tax Act, 1961, itself does not impose any limitation beyond what is specified in Section 112A(6), the Income Tax Return (ITR) utilities currently do not permit the claiming of rebate against LTCG under Sections 112 and 112A or against STCG under Section 111A. In such cases, taxpayers may manually compute and claim the eligible rebate while filing their return for Financial Year 2024-25.”
Surana explains: “A similar issue arose before the Honourable ITAT Ahmedabad in case of Jayshreeben Jayantibhai Palsana, wherein the Tribunal held that the Commissioner (Appeals) erred in affirming such denial, as it contradicted the clear language of the law for AY 2024-25. Accordingly, it held that the assessee is entitled to rebate under Section 87A even where income includes STCG taxable under Section 111A. The Assessing Officer is directed to grant the rebate, recompute the tax liability, delete the demand, and issue refund, if due, in accordance with law.”
aniltikotekar4sme.com 