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Stocks, ETFs and mutual funds: new capital gains tax rates

Stocks, ETFs and mutual funds: new capital gains tax rates
Capital Gains Tax: How stocks, ETFs and equity mutual funds are taxed now · livemint.com

When people sell investments for a profit, the government takes a share of that profit, called a capital gains tax.

India's Union Budget 2024 changed many of these tax rules to make them more similar across different investments.

For most long-term investments, like shares or mutual funds held for more than a year, the profit is taxed at 12.5%.

But the rules depend on what you invested in and how long you held it.

Stocks, exchange-traded funds and equity mutual funds are considered long-term after just 12 months and pay 20% tax on short-term profits.

Some investments, like gold, overseas mutual funds and fund-of-funds, need to be held for more than 24 months to get the lower long-term rate.

Debt mutual funds bought after April 2023 are taxed at your regular income tax rate, which may be higher.

Real estate bought after July 2024 gets the new 12.5% long-term rate after 24 months.

For older properties, taxpayers can choose whichever tax calculation is lower.

So investors must check the asset, purchase date and holding period before selling.

Key facts

Standard LTCG rate
12.5%
Equity STCG rate (stocks, ETFs, equity mutual funds)
20%
LTCG holding period for stocks, ETFs, equity mutual funds
More than 12 months
Debt mutual fund cutoff date
1 April 2023
Debt mutual funds bought on/after 1 April 2023
Taxed at investor's slab rate
Real estate purchase cutoff date
23 July 2024
Real estate LTCG rate after 23 July 2024
12.5% after 24 months
LTCG holding period for gold, overseas funds, international ETFs
More than 24 months

Sources

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