Investing
Capital Gains Tax in India: All Budget 2024 Changes and What They Mean for You
Everything that changed in capital gains taxation after Budget 2024 — LTCG at 12.5%, STCG at 20%, removal of indexation, and the impact on equity, debt, gold, and property investments.
Read with the publication date in mind. Portal requirements and rates can change. How to report a correction.
Budget 2024 overhauled capital gains taxation — the most significant change in over a decade. Effective July 23, 2024, rates were rationalised across asset classes, indexation was removed for most long-term assets, and STCG on equity was raised. Every investor in stocks, mutual funds, gold, and property needs to understand these rules.
Equity Shares and Equity Mutual Funds
STCG (≤ 12 months holding): Rate raised to 20% (from 15%). STT must have been paid.
LTCG (> 12 months): Rate raised to 12.5% (from 10%). Annual exemption raised to ₹1.25L (from ₹1L). On ₹2L LTCG: ₹75,000 is taxable at 12.5% = ₹9,375 tax + cess.
Grandfathering from January 31, 2018 continues for equity held since before that date — cost basis is the January 31, 2018 price or actual cost, whichever is higher.
Tax loss harvesting: sell equity at a long-term loss before March 31, repurchase next day. Books the loss to offset future LTCG. LTCG losses offset only LTCG; STCG losses offset any capital gains.
Debt Mutual Funds, Gold, and Property
Debt MF (from April 2023): all gains taxed at slab rate regardless of holding period. No LTCG benefit. For 30% taxpayers, debt funds no longer offer tax advantage over FDs.
Gold (physical, ETFs, funds): STCG < 24 months — slab rate. LTCG ≥ 24 months — 12.5% without indexation. Exception: Sovereign Gold Bonds (SGBs) — maturity gains completely tax-free.
Property: STCG < 24 months — slab rate. LTCG ≥ 24 months — 12.5% without indexation (for post-July 23, 2024 purchases). Pre-July 2024 properties: choose lower of 20% with indexation or 12.5% without.
Property tax relief: Section 54 (reinvest in another house within 2 years — defer entire tax), Section 54EC (invest ₹50L in NHAI/REC bonds within 6 months — defer tax).
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