Question
How is LTCG on shares taxed — the ₹1.25 lakh exemption and 12.5% rate?
Answer
Bottom line: Long-term gains on listed shares are taxed at 12.5% on the amount above ₹1.25 lakh a year.
1. LTCG
On STT-paid shares held over 12 months, Section 112A charges 12.5% on gains beyond the ₹1.25 lakh annual exemption, with no indexation.
2. STCG
Held under 12 months, gains are taxed at 20% under Section 111A.
3. Effective date
These rates apply to transfers on or after 23 July 2024.
Work it out with our Capital Gains Tax Calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.