22 hrs ago

Capital Gains Tax Rules Vary Across Investment Assets

Different investments can have different tax rules when you sell them for a profit.

Stocks, equity mutual funds and ETFs become long-term investments after more than one year.

Their short-term gains are generally taxed at 20%, while long-term gains are taxed at 12.5% above the applicable exemption.

Gold ETFs, REITs, InvITs and listed bonds also use a one-year threshold for long-term treatment.

Some investments, such as physical gold and overseas mutual funds, need to be held for more than two years for long-term treatment.

Debt funds bought from April 1, 2023, onward are generally taxed according to the investor’s tax slab.

Property bought after July 23, 2024, generally faces a 12.5% long-term tax without indexation.

For some properties bought earlier, taxpayers may compare two tax calculations and use the lower liability under the applicable rules.

Key facts

Equity LTCG holding period: More than 12 months for equity mutual funds, ETFs and stocks.
Equity tax rates: Short-term gains are taxed at 20%; long-term gains are taxed at 12.5%, subject to applicable exemptions.
Other 12-month assets: Gold ETFs, REITs, InvITs and listed bonds qualify for long-term treatment after more than 12 months.
Debt funds purchased before April 1, 2023: Long-term treatment begins after more than 24 months, with LTCG taxed at 12.5%.
Debt funds purchased on or after April 1, 2023: Gains are generally taxed at the applicable slab rate regardless of the holding period.
Gold and international investments: Gold mutual funds, physical gold, overseas mutual funds, foreign equity and international ETFs generally require more than 24 months for long-term treatment.
Real estate: Property bought after July 23, 2024, is generally taxed at 12.5% on long-term gains without indexation; eligible earlier purchases may allow a comparison with 20% taxation with indexation.

businesstoday.in · 20 hrs ago