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India’s Capital Gains Tax Compared With Global Regimes

Capital gains are the profits someone makes when selling an investment or other asset.

India usually taxes these profits in the year the asset is transferred.

The tax rate depends on how long the asset was held and what type of asset it was.

Some listed shares and equity mutual funds have a 20% short-term gains rate.

Long-term gains on those investments are taxed at 12.5% after gains exceed ₹1.25 lakh in a year.

Many other long-term assets also have a 12.5% rate in India for newer transfers, although some older property owners can compare two tax methods.

Other countries use different systems.

Some countries have no standalone capital gains tax, while others include part of the gain in normal taxable income.

This means headline tax rates cannot always be compared directly.

Key facts

Relevant Indian law: Section 45 of the Income Tax Act, 1961 generally taxes profits from transferring a capital asset in the year of transfer.
Indian STCG rate: Generally 20% for specified listed equity shares and equity-oriented mutual funds transferred under the securities transaction tax framework.
Indian LTCG rate: 12.5% on qualifying long-term gains above the annual ₹1.25 lakh exemption threshold for specified equity assets.
Other long-term assets: A 12.5% rate without indexation generally applies to many such assets transferred on or after July 23, 2024.
Older property: Resident individuals and Hindu Undivided Families may compare the earlier 20% indexed regime with the new 12.5% regime for certain immovable property acquired before July 23, 2024.
No standalone CGT examples: Singapore, Hong Kong SAR, the Cayman Islands and New Zealand are identified as jurisdictions without a standalone comprehensive capital gains tax framework.
Highest cited individual rate: The comparison identifies a headline individual rate of up to 45% for Korea.

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