Archive · 21 Jul 2026
India Clarifies LTCG Tax Rules for FY 2025-26
The Indian government has clarified that it will not change the Long-Term Capital Gains (LTCG) tax on equities for retail and domestic investors.
This is important because the last date for filing income tax returns is approaching.
The government earns a lot of money from LTCG taxes, which increased by nearly 79% year-on-year.
For equity investments, if you sell them within 12 months, you pay a 20% tax on the gains.
If you hold them for more than 12 months, gains up to ₹1.25 lakh are tax-free, and anything above that is taxed at 12.5%.
Investors should consider their holding periods and tax implications before selling their investments.
The Indian government has clarified that it will not change the LTCG tax on equities for retail and domestic investors.
LTCG tax collections surged nearly 79% year-on-year, reaching ₹1,29,158 crore in AY 2025-26.
For equity investments, gains are classified as STCG if held up to 12 months and taxed at 20%.
Gains are classified as LTCG if held for more than 12 months, with an exemption limit of ₹1.25 lakh per financial year.
Investors should consider their holding periods and tax implications before selling their investments.
- Who
- Indian government and equity investors
- What
- Clarification on LTCG and STCG tax rules
- When
- FY 2025-26
- Where
- India
- Why
- To provide clarity on tax rules and boost investor confidence
Investor Advocacy
Government Revenue
Tax Rates
Investor Advocacy
Investors prefer lower tax rates to maximize returns.
Government Revenue
The government benefits from higher tax collections to fund public services.
Exemption Limits
Investor Advocacy
Investors advocate for higher exemption limits to reduce tax liability.
Government Revenue
The government sets exemption limits to balance revenue needs and investor incentives.
- LTCG Tax Rate (FY 2025-26)
- 12.5%
- STCG Tax Rate (FY 2025-26)
- 20%
- LTCG Exemption Limit
- ₹1.25 lakh per financial year
- LTCG Tax Collections (AY 2025-26)
- ₹1,29,158 crore
- Holding Period for LTCG
- More than 12 months
- Holding Period for STCG
- Up to 12 months